Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
Jewellery, archaeological collections, drawings, paintings, sculptures & any work of art
Stock is not covered under the list of assets. So dont worry; no capital gains arise on transfer of stock-in-trade. There are
different tax implications on long term assets and short term assets.
Calculate the Full Value Consideration (it is the total sale value of asset usually mentioned in the sale deed subject
to some other provisions of income tax law);
Calculate the full value consideration (it is the total sale value of asset usually mentioned in the sale deed subject
to some other provisions of income tax law);
Reduce indexed cost of acquisition and indexed cost of improvement from net consideration;
Resultant value is Taxable Long Term Capital Gains; calculate the tax on it.
Indexed Cost of Acquisition = (Cost of acquisition x Cost ination index of year of sale) / cost ination index of
year in which asset is first held/purchased.
Indexed Cost of Improvement = (Cost of Improvement x Cost ination index of year of sale) / cost ination index
of year of improvement;
If asset is acquired before 1-Apr-1981, cost of acquisition is Fair Market Value as on 1-Apr-1981 or the original
cost of acquiring asset whichever is higher;
Expenses on any improvement done before 1-Apr-1981 is not deducted from the net consideration.
Indexation benet is provided to adjust the cost of acquisition and improvement according to ination raised
W eb page converted to PDF w ith the PDFmyURL PDF creation API!
during the period. Cost Inflation Index (CII) is used for calculating the indexation benefit.
On transfer of Equity shares on which Securities Transaction Tax (STT) has been charged = 15% x Short Term
Capital Gains.
If you transfer any equity shares and LTCG arises on it, then no tax is charged on such LTCG if Securities
Transaction tax is paid;
Tax on LTCG arising on listed shares (in case of STT not paid) shall be calculated at the rate of 10% of Capital Gains
(Net Consideration (minus) cost of acquisition without indexation) or 20% of Capital Gains (Net Consideration
(minus) Indexed Cost of acquisition) whichever is lower.
Lets understand the concept of sale of shares with the help of an illustration:
Ritu purchased shares of Punj Lloyd through National Stock Exchange on 30-Jun-1995 for 20,000. On 1.1.2016 she
W eb page converted to PDF w ith the PDFmyURL PDF creation API!
transferred those shares to Puneet for 1,30,000. STT wasnt paid on the shares.
Since STT is not paid on transfer of shares, hence LTCG shall be chargeable to tax as follows:
Cost of acquisition for the seller = purchase price of asset plus improvement expenses incurred by the person
from whom asset is inherited;
Indexation benet for cost of acquisition and improvement is provided for the year in which original owner
acquired the asset.
Rahul sold a land on 12-Dec-2015 for Rs. 51 lacs. He inherited the land from his grandfather Mr. Kundan Lal on 10-May-
Long term capital loss can be set-o only against long term capital gains arising from sale of another asset. But short term
capital loss can be set-off against both short term and long term capital gains.
You have to deduct TDS @ 1% of the payment made to seller under Section 194-IA.
Make the payment to party and deduct TDS @ 1% of the payment made;
Download the form 16B (Certificate of TDS deducted) and give it to seller for his records.
Following expenses are deductible from sale amount of house property at the time of computing capital gains:
When you sell a property, remember that if sale amount is less than stamp duty value calculated by Stamp Valuation
Authority, then stamp duty value shall be deemed to be Full Value Consideration. Lets under the concept with the help of
an illustration:
Avoid cash transactions. Whether you receive money or pay it, do it via account payee cheque or account payee bank draft.
A property held for more than 3 years (i.e. a long term house property) is sold;
A new house is purchased 1 year before or within 2 years of sale of house property;You can also construct a new
house but same should be constructed within 3 years of sale;
W eb page converted to PDF w ith the PDFmyURL PDF creation API!
Dont sell the new house property till 3 years from date of purchase.
Quantum of Exemption: Amount of Capital Gains or amount invested in new house property whichever is less.
Expert Advice: If you cant utilise the sale amount for purchase/
construction of house property till the date of filing ITR, then
deposit the unutilised amount in Capital Gains Deposit Account
Scheme.
Shikha acquired a residential house in March, 2000 for 10,00,000 and made some improvements by way of additional
construction to the house, incurring expenditure of 2,00,000 in December 2004. She sold the house property in
November, 2015 for 75,00,000. She acquired residential house in February, 2015 for 25,00,000.
L e s s : Indexed Cost of
Rs. 4,50,417
Improvement (2000001081480)
*Since residential house has been purchased within 1 year before sale of the house property, hence exemption u/s 54 is allowed of
amount invested or the amount of capital gains whichever is lower i.e. 25,00,000.
Exempted Capital Gains = (Amount Invested in New Asset Capital gains)/Net Sales Consideration*
Expert Advice: Ensure that you own only 1 house (other than the
new house to be bought) as on date of sale.
For detailed implications on taxability of capital gains, feel free to reach us. Our experts shall always guide in a manner that
reduces your tax liability.
Satish
Reply
My father purchased a house plot in 1990 for 1,00,000 rupees. ( Registration cost is
9,000 rupees)
He constructed a house in 1991 for 5,00,000 rupees.
My father gifted that property to his son (me) on 10th February 2017 (around 1
month)
Now I want to sell that property to intended purchaser for 1,20,00,000 (1 crore 20
lakhs) rupees in another 20 days ( less than 2 months after I got property as gift).
Now my question is
1. Since the property is acquired as gift and sold within 2 months after I got it as gift.
Should I consider the capital gain amount as STCG?
2. Should I consider it as LTCG and invest that amount in another residential
property as per 54 / 54F?
3. Since I got the gift from my father and sold the property within 2 months after
acquiring it. How the capital gain tax is calculated to me and not to my father. STCG
or LTCG?
Reply
1. This will be considered as the LTCG as holding period of your father will also be
counted.
2. You are eligible for the investment as per the section 54 subject to other
conditions as may be applicable.
3. As described above, it will be LTCG and will be taxable in your hands as you are
the seller, not in the hands of your father. Normally, the amount of Capital gain
can be calculated after deducting the Indexed cost of property and Indexed cost
of improvement from the sale considerations. However, there are a number of
factors which needs to be checked/considered while entering in the property
transactions. For customized opinion and safe tax planning, you can connect with
us at support@tax2win.in or at +096609 96655.
Reply
REPLY A MESSAGE
SEND
Quick Links
- About
- Contact
- Pricing
- FAQ
Our Services
- Upload Form 16
- CA Assisted
Tax Tools
- Income Tax Calculator
- HRA Calculator
- Gratuity Calculator
Other Links
- Terms & Conditions
- Privacy Policy