# Cost Inflation Index Chart Table for FY 2018-2019 (AY 2019-2020) + Old Table 2001 – Calculator For Income Tax Capital Gain Purpose

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## How to Calculate capital Gains using CII

Cost Inflation Index is used for calculating Long term Capital Gain. Every year, Income Tax department notifies Cost Inflation Index.  CII is very useful to calculate Long Term Capital Gain Tax.

Capital Gain = Sales Consideration – Indexed Cost of Acquisition

Indexed Cost of Acquisition = Actual Purchase Price *  (Index in year of Sale / Index in Year of Purchase)

If the property is purchased before 2001, then you need to get the Fair market value of the property in 2001 and the use that for Indexed cost. In such cases,

Indexed Cost  = Fair Market value in 2001 *  (Index in year of Sale / Base Index i.e. 100)

In the post (further below), I have explained how can you get the fair market value of the property in 2001 (in case the property is acquired before 2001).

## New Cost Inflation Index (CII) Chart / table for 2019-2020

New CII Index Numbers: (applicable from 2017) – Base year is now changed from 1981 to 2001

Budget 2017 has changed the base year of Indexation from 1981 to 2001. Read details & impact on Investors & capital gain.

The cost inflation index notified are as under :

 YEAR CII YEAR CII 2001-02 100 2012-13 200 2002-03 105 2013-14 220 2003-04 109 2014-15 240 2004-05 113 2015-16 254 2005-06 117 2016-17 264 2006-07 122 2017-18 272 2007-08 129 2018-19 280 2008-09 137 2009-2010 148 2010-11 167 2011-12 184

From April 2018, tax rules have changed and a penalty of upto Rs 10000 will be levied if the return is not filed on time. Also, the ITR revision time limit is also changed from 2 years to 1 year.

how you can file your ITR online for free on Income Tax website.  Also, you need to make sure that to check TDS amounts.

Example 1 : How to Calculate Indexed Cost of Acquisition Asset

Purchased House on 01-Jul-2004 =  Rs 20 Lakh

Sold House on 01-May-2018 = Rs 75 Lakh

 Indexed Cost of Property Actual Purchase Price *  (Index in year of Sale / Index in Year of Purchase) Rs 20 Lakh  *  (280 / 113)  =  Rs 49.55 lakhs Sale Amount 75 Lakh Capital Gain 75 Lakh –  Rs 49.55 lakh = Rs 25.44 lakhs

Example 2 :

Purchased House on 01-Jul-1999 =  Rs 25 Lakh

Sold House on 01-May-2018 = Rs 75 Lakh

As the house is purchased before the new base year (2001),  you will need to get the Fair Value of property as on 1st April 2001.
You can then use that value to calculate the indexed cost

Indexed Cost: =  Fair Value (in 2001) * (280/100)

Sale Amount=  Rs 75 lakh

Capital Gain =  Rs 75 lakh – Indexed cost (as above)

## How to calculate Fair Market Value of the Property

There is no fixed formula to calculate the Fair Market Value of the property. However, you can use following methods to calculate:

• Check average sales price of similar properties in your area that was sold in 2001 –  It may be difficult to know or find
• Check the circle rates, if available:   Circle rates are fixed by the state government or the local development authority and normally used for  stamp duty and registration charges. These are usually lower than the normal market value.
• Check real estate indices:  Indices such as the National Housing Bank’s (NHB’s) Residex, and two indices of the Reserve Bank of India (RBI)—Housing Price Index (HPI) and Residential Property Price Index (RPPI) can give an idea about the prevailing pricing trends in various cities
• Registered Valuer  (Recommended) –  You can take help of Government-approved valuers follow a standard process for the valuation and provide a detailed report. Fee and charges that a valuer can charge are also prescribed under the Act, and depend on the value of an asset. For instance,
• for first the Rs5 lakh of asset value, fee would be 0.50% of the value.
• For next Rs10 lakh, it would be 0.20%,
• for next Rs40 lakh 0.10% and 0.05% of the value thereafter

So, for e.g. for a property valued at Rs 70 lakhs, the value may charge approx Rs 10000.

## How to save Capital Gains Tax

Old CII Index Numbers:

 Financial Year Cost Inflation Index Financial Year Cost Inflation Index 1981-82 100 1999-2000 389 1982-83 109 2000-01 406 1983-84 116 2001-02 426 1984-85 125 2002-03 447 1985-86 133 1986-87 140 2003-04 463 1987-88 150 2004-05 480 1988-89 161 2005-06 497 1989-90 172 2006-07 519 1990-91 182 2007-08 551 1991-92 199 2008-2009 582 1992-93 223 2009-10 632 1993-94 244 2010-2011 711 1994-95 259 2011-2012 785 1995-96 281 2012-2013 852 1996-97 305 2013-2014 939 1997-98 331 2014-2015 1024 1998-99 351 2015-2016 1081 2016-2017 1125 2017-2018 to be announced 2018-2019 280
If you have any query related to Calculating Capital Gains , please use the comments box below.

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The author is a Chartered Accountant and loves to write about Personal Finance, Wealth Management, Taxation etc. Disclaimer - The articles on this website is for informational and knowledge purposes and should not be treated as financial advice, Please consult your financial advisor before taking any investment decision.

1. Dear Sir(s)

I bought a property in India and nearly full advance was paid in 2005. The property was completed in Dec 2009. I sold it in March 2014. Please confirm which year will be counted for the purpose of index (2005 or 2009)?

Thanks and regards

Girish

• Hi Girish,

For indexation, you can use 2005.

High Court Judgement in case of Mrs. Madhu Kaul Vs. CIT –

Identification of the flat or physical delivery of possession is irrelevant as right to hold properly stands crystalised upon allotment. The allotment of a particular flat and delivery of its possession would relate back to the allotment. The payment of balance installments, identification of a particular flat and delivery of possession are consequential acts, that relate back to and arise from the rights conferred by the allotment letter.

So, the date of allotment letter is relevant. and can be taken for Indexation purpose.

• I purchased a 2 BHK flat in 1993 ( 06-01-1993) in Pune for a sum of Rs.4 Lakhs .
I want to sell it now in 2018-19 ) for a sum of Rs.95 Lakhs . What will be indexed cost and how much tax i will have topay.

• Hi Satyen, you need to get the fair market value of the property as in 2001 and then calculate the indexation cost.
Based on that indexation cost, you can calculate the capital gains.

2. Dear Sir(s)

I am trying to complete the new on line tax return for AY 2014-15. The first issue is when I save the draft, the saved draft does not open and has no data. and the second issue is relating to claiming balance allowance (tax free income) while I have only long term capital gain. The system calculates full tax at 20%.

Girish

• Thanks Vivek

You are really wonderful. Many thanks

I am using ITR2 and I am a non resident Indian. I also note that the declaration of the assets abroad seems strange for NRI, Should I not bother to answer this question?

Many thanks

Girish

• Declaration of assets abroad is applicable for resident only and not for NRI.
In Java Utility form, when you select the Status as NRI, the schedule FSI & TR becomes Not applicable.

Are you using Excel form or Java form

• Thanks Vivek

I am using Java form and would use Excel if that is available for AY 2014-15.

Much appreciated.

Girish

• Ok. So if you are using Java, then once you select Resident status as Non resident then those 2 schedules will not be applicable.
ALso, excel file is available for AY 2014-15 at same link.

3. Shri Vivek Ji

You will kindly recall regarding my initial request in relation to availing the balance unused tax free allowance (tax free income 200,000 less interest 35,000) which should be available to be used in long term capital gains. I have done all calculations in ITR2 (Excel utility) but I am not able to find a way to take advantage of unused allowance. Please guide on which page I can off set this unused tax free allowance.

Thanks for your kind help and guidance.

Girish

• Hi Girish,

Can you please let me know the Income under Different heads. Normally slab is not applicable for Capital Gain in case of Non-resident.

• Thanks Vivek

Interest Income NRO 25,828 (TDS 7,892)
Interest NRE 11,413 (not taxable)
Capital gain 68,50,725. (tax paid on self assessment 494,768)

There must be a way for Indians also to claim the difference unused allowance?

If NRI is not eligible, I will pay the difference self assessment tax.

Much appreciated

Girish

• Hi Girish,

Unfortunately, NRI cannot claim basic exemption limit while calculating Long term capital gain. So, all LTCG will be taxed for NRI (without using the basic exemption limit.

How have you calculated the Capital Gain ? What is the Purchase price & sale price ? Have you taken Indexed cost? Are you not investing / planning to invest in another property to save tax.

Answers to above will help to calculate correct tax liability.

• This is ref.for capital gains. I am Senior citizens age66year .I have to Sale my Land purchase in the year 1089-1099 of Rs.1,00,000 Lac. Now as per circial rate land maybe expected to be sold Rs.1,05,00,000.what is cap.Tax.can I purchase an house to save Tax/Bond.

4. Sorry Vivek

The capital gain is only 31,16,368 and not 68,50,725. My mistake.

Regards

5. Hi Mr. Jain,
I really need your help to save my tax.
My Property Details:
A. One plot in Greater Noida at my father’s name purchased in 2003. It’s registered under lease of 99 years.
B. I have a flat in Ghaziabad registered under my name, purchased in May 2011. Got possession in Sept 2012. It’s registered under freehold property. Under loan of 11Lac now.
C. I booked another flat in Greater Noida at my mother’s (primary) and my name (secondary) in May 2014. Possession is expected in Dec. 2016. We have taken it under 50%-50% payment plan and made 50% (approx. 18Lac) of payment through my father’s cheque.
D. Now planning to book form for DDA flats and confused under whose name shall I book: my wife or at my name?
My family occupation details:
E. My Father is on pension, got retired in Dec 2013
F. My Mother is a home maker
G. My Wife is a home maker
H. I am working in a private MNC.
Issues:
I am selling my flat (B), which I purchased it of INR 2,052,830 (at BSP INR 1,880/psf) and got registered at the rate of INR 2300/psf (INR 169,000 approx in total registry cost). Also I spent INR 250,000 to get it furnished after taking its possession.
Now I am selling it of INR 3,800,000, however as per current circle rates.
And want to use this total amount after repaying bank loan for constructing the plot which is at my father’s name (A).
Question1: What will be my actual purchasing price for indexing capital gain?
a. Actual buying rate (1880psf) INR 2052830+INR169000+INR250000 = INR 2469830
b. Registry Rate (2300psf) INR 2478998+INR169000+INR250000 = INR 2902527
Question2: If your answer is ‘a.’ of my previous question, than is there any way by which I can save tax while doing a construction on my father’s plot?

Thanks
Abhishek Gupta
9310005889

• 1) Your cost of acquisition should be your cost price + registry cost. normally, the furnishing cost is not included.

2) You cannot claim tax benefit for constructing house on father’s leasehold plot. However if you can get the lease or sub-lease in your name and then construct the flat, you may be able to get benefit.

As the matter is bit complex, I advise that you consult with your trusted CA before taking any action.

6. Dear Vivek
My father sold a residential plot of land within munciple corporation limits measuring 150 yards on november 3rd 2014 for Rs. 720000/ONLY WHICH HE HAS BOUGHT in 1997-98 for Rs. 60000/only as per registration deed He is senior citizen and wants to gift the total proceed to me. Kindly suggest the ways to minimize his tax liability.

S.K.KHANNA
AMBALA CANTT.

7. Dear Sir,
Ihave land inherited since 1973.It is ancestor property held for more than 150 years.Iwould like to sell it now.How the tax will be calculated?

• you need to calculate the tax based on assessed value in 1981 and sale amount. You need to get the property valuation done for 1981.

• I have similar case as mentioned by bhave and anant, the property is bought in 1973 and have an agreement for the same. Can I assume that as a price or need to do a revaluation as of 1981 ?

• It is better to have a revaluation. if not, you can consider the 1973 price at 1981 price and then index it. You will loose the benefit of indexation from 1973 to 1981.

8. Dear Vivek – Facts as follows:

Purchased Site in March 1992 = Rs. 80,300
Sold House on 13 November 2014 = Rs.56,25,000
Index in year of purchase = 223
Index in year of sale = 1025

Indexed Cost of Property = Actual Purchase Price * (Index in year of sale / Index in year of purchase)
i.e.
Indexed Cost of Property = 80,300 * (1025 / 223) —- Rs. 369091.9282511211
Sale Amount = Rs.56,25,000
Capital Gain = 56,25,000 – 369091.9282511211 = Rs. 5255908.071748879

Out of Rs. 52,55,908, i have reinvested Rs. 4275000 in another property on 29th November 2014 and have kept the remaining Rs.10,00,000 odd in Capital Gain.

Kindly confirm if I’m well within the fence of rules. Thanks in advance.

Regards,
Bala.

• 1) Did you purchased the plot or house in 1992. if plot, you can also use Construction cost as Cost of Improvement.
2) Other calculations looks OK.
3) Whether 10 lakh in invested in Capital Gains bond ?

9. Dear Vivek,

My mother passed away in Dec 2012. She died intestate leaving my younger sister and me as her only surviving legal heirs. She has left behind a 2bhk flat in Navi Mumbai, which she bought out of her savings and pension benefits, in Dec 1998. My father passed away in 1999. The house is registered in her and my sister’s name. I am my mother’s nominee in the said property.

After some initial disagreement my sister & I have decided to divide and share such parental property equally between us.

As my sister is in Bangalore she is not interested in preserving the said property. I am currently residing in the said flat and would like to keep it in my mother’s memory. I am offering to buy my sister’s share and pay her out of the proceeds of my own flat in Thane. I have also offered to pay her whatever she has paid towards the loan while she was residing with my mpther.

My questions are:

1. Can I acquire my sister’s share in the said property legally and paying her out of the sale proceeds of my flat in Thane and will I get exemption from long term capital gains on buying such share of my sister in such legacy, for the amount due to LTCG tax on such sale of my Thane flat? i.e will such acquisition be treated as having purchased another residential property for the purpose of sec 54 IT Act.

2. As my sister has paid certain amount towards HDFC home loan in EMIs for the said property and I have offered to repay her, will such repayment qualify as payment towards acquiring house property and included in exemption amount for purpose of calculating LTCG?

3. After calculating the amount towards LTCG from sale of my Thane flat, will the remaining amount if any attract any further taxes such as ”income from house property”?

4. Do I have to pay stamp duty and registration and/or any other taxes when I acquire/transfer such share of my sister in my favour?

Thank you

Based on my understanding,

You can sell your Thane flat and acquire share from your sister’s property. It will be treated as buying the residential property.
You need to pay stamp duty and register the property fully in your name.

When selling your Thane flat, you need to first calculate capital gain on your flat. See how to calculate in the post above.
To take capital gain exemption benefit, you need to invest entire profit into another residential property.
The balance amount you can invest in Capital Gains Bonds for 3 years to get exemption.
See details below
https://wealth18.com/how-to-save-capital-gains-tax-on-sale-of-property-in-india/

• dear vivek,, thanks for the prompt response and the clarity you have given me. much appreciated. will do as advised. thanks again .Radhika.

10. Dear Vivek Sir,
I have purchased NA plot in 2002. Bought under construction property in June 2013. Yet to receive its possession. Want to buy another ready-to-move flat in a month. No IT exemption on home loan interest taken yet as it is under construction property. (May sell it or give it my brother for staying purpose, to be decided on taxation issues).
Q.1. Is cost indexation applicable to selling of NA land also?
Q.2. May I repay the loan of under-construction property (still loan full disbursal is not done) by selling NA plot? I mean will it help save tax on capital gains.
Thanks.

• 1. yes cost indexation is available for land also.
2. No, any capital gain arising from sale of land cannot be adjusted by repaying home loan on under construction property in June 2013.
You can only take benefit if the property is purchased afterwards of within 1 year before the sale.

• Now, I am purchasing ready-to-move flat (in city C) which costs more than 50 lakhs, will do registration, home loan processing and take possession before the end of FY 2014-15. My above under-construction flat is in City B, will get possesion only in first quarter of FY 2015-16. I work in city A and stay in employee provided residence by paying Lecesnse Fees (govt). Dont get HRA.

1) May I declare both the flats as rented (as I will not stay in these flats) and will take income tax benefit on the interest paid without any limits for both home loans? Or One will be always considered self occupied irresptive of its occupancy or let-out?
2) May I change any of the flats delcared as self-occupied to let-out and vice-versa by considering income tax benefit?
3) How, when, by whom 1% TDS on property costing > 50 lakhs is to be paid? How to reclaim it (can we)?
4) To whom the above 1% TDS is to be paid, whose responsibility it is, buyers or buiders? Is it before Registration of Sales agreement or At the same time or after registration?
Thanks sir.

• 1) You can treat both flat as rented as you donot live in city B & C. You can claim full interest. But you also need to show notional amount as deemed rent (Annual rental value or actual rent) as Income.

2)1% TDS is deducted by buyer of the property and deposit to government against seller PAN. Seller should make sure that TDS has been deposited by buyer and the amount is reflected in Seller’s Form 26AS.
Seller will then claim this TDS while filing his income tax return.

11. In case of long term captial gain on sale property
can it be taxed at 10% without taking benefit of indexation ?
or have to compulsory take indexation n taxed at 20% ?

12. Hi dear.

I wanntd to know that as I have purchased the flat in the year 1991. How much stamp duty do I have to pay as Tht time there were no rules as such . I had purchased in Rs. 1, 20, 000.

13. I booked a flat in 2007 and then I continued to pay some amounts (1 lac, 2 lac etc) every 6 months and finally I made the final payment in 2012, but I have not done the registration of the property in my name, now I want to sale the property, how much tax I will have to pay. Total Purchase price = 14.5 Lac and I am selling it now for 28 lac.

• 1) When are you selling the property ?
2) After booking the flat, you must have got allotment letter with unit details ?

14. My father purchased plot for Rs 6,750 /- in 1979 on lease (for 30 yr) from housing board and @ Rs 135 p.a. lease rent for constructing house.
The house was constructed on the said plot for Rs 2,00,000 (No documentary proof available) in 1982.
After the demise of father, the house was sold for Rs. 47,50,000/- in Aug 2014.
The above amount was shared in 5 equal parts i.e of Rs 9,50,000/- each among my mother and 4 siblings.
My queries are :
1 How much Income Tax i will have to pay on my part of Rs 9,50,000/-.?
2 Can i save income tax by purchasing 54EB Bonds?

15. Thank you very much for the reply.
Will you pl let me know within how much period i should by the bonds for saving the tax?
Thank you once again,,,,,

• As per provisions of Income Tax Act, 1961, any long term capital gains arising from transfer of any capital asset would be exempt from tax under section 54EC of the Act if:

1) the entire capital gain realized is invested within 6 months of the date of transfer in eligible bonds
2) Such investment is held for 3 years
3)To avail of capital gain exemption, the bonds so acquired cannot be transferred or converted into money or any loan or advance can be taken on security of such bond within 3 years from date of acquisition else, the benefit would be withdrawn
4) If the amount invested in bonds is less than the capital gains realized, only proportionate capital gains would be exempt from tax.

So you must invest within 6 momths.

16. Sir,

We have sold our property on Aug 2014. Actually this property was brought by my father & my mother in the year 1980. My father expired on 1997 and there was no will made by him on the property. Soon after purchase , a good amount of money was invested to modify the house (like re plaster, re wire the electrical lines , water lines etc- for which at present we don’t have any supporting documents to produce)
We are 4 members including my mother. We all jointly signed in the registration documents for the total sale consideration of Rs 76 lakhs .An amount of Rs 76000/- was paid by towards TDS.
The buyer is an NRE A/c holder. Since I am also an NRE account holder (4th Party) , he had issued an NRE cheque and deposited the same in My NRE A/c. For others they received Demand drafts. Will I have to pay tax ? if so, As I have not purchased another land ever since , I would like to invest the same in capital gain a/c (before 6 months). Could you please advice the below
1. How much I have to invest in my capital gain a/c ?
2. If I am not openging capital gain a/c , how much I have to pay tax
3. If I am not opening capital gain a/c , how long I can keep this amount in my bank for purchase of another land/flat
4. Does all 4 of us need to open capital gain a/c at the same time ?
5. Can we open/ operates individually in separate bank capital gain A/c ? (since one party already acquired land and is with the process of house construction)
Year Rs Cost Inflation Index
Purchase 1980 175000 100
Sale 2014 7600000 1025

Capital Gain 76-(1.75x(1025/100))
5806250
TDS 76000 With TDS Capital Gain Tax @ 20%
1st pty 2000000 26.58% 20202 2020202 26.58% 1543394.46 308678.892
2nd pty 1524000 20.26% 15394 1539394 20.26% 1176066.63 235213.326
3rd pty 2000000 26.58% 20202 2020202 26.58% 1543394.46 308678.892
4th pty 2000000 26.58% 20202 2020202 26.58% 1543394.46 308678.892
TDS
7524000 76000 7600000 5806250 1161250
I hope you will be able to guide us appropriately

Regards/ Ruby

• Hi Ruby, if you do not intend to buy property in India, then you can invest your share your Capital Gain in the Capital Gain Bonds.
These bonds are issued by NHAI & REC and offer interest of 6%. There is lockin for 3 years.

17. Respected sir
My flat is in nasik
agreement to sale is done in 1998
but sale deedf was done in 2005
my question is while calculating capital gain which year of purchase i should consider?
i had possession of flat since 1998 may

• Hi Sandeep,

it seems that you can take the indexation from 1998, if you have sufficient document in hand regarding the agreement.

18. Hi Sir,

I was alloted a flat in March 2009 by Greater Noida authority & I opted for installment payment at that time. In Jul’13 I paid them the entire amount when authority asked to take posession. In Feb’15 I sold that flat. I want to compute my cost after applying Indextaion.
Also, pls tell me that if index would apply from date of allotment (Mar’09) or from date of posession which is Jul’13.

Total cost after all installments, registry etc is 10,50,000.

• Also, will my property profiut be considered in Long term or short gain since it was alloted to me in Mar’09 & I took posession in Jul’13 and sold in Feb’15?

• it should be long term. but there are different views.

Many expert says that The asset acquisition date is reset once you take the possession of the property.

before taking the possession, the asset is “Right to have the property”
After possession, the asset is “House property”

19. I sold a plot on may 2014 which was purchased on oct 2002 in the name of my wife.
Now I purchased a flat in june 2014 with loan of Rs. 20 Lac by me (loan in single name by me and guarantee by my wife ) and title deed in joint name with my wife second name.
Please advise me I shoe invest her capital gain amount in this flat cost

20. Looking to the quesgtions posted to you and the advice that you have rendered to the querrists/readers, I am encouraged to approach you for my querry as below:

I intend to sell house built in 1973, at the then cost of Rs.39,000/-. The sale value that I am likely to get is Rs.67 lakhs. How much capital gains tax would I have to pay, and to avoid payment of capital gains tax, how much amount I should invest for infrastructure bonds. I am willing to keep the amount in the bond(s) for its full term which I feel is 7 years. Pl guide. Thanks very much.

21. Dear Sir,
I am selling a N.A. plot in Feb. 2015. I purchased the same in 2004. I have to save tax on capital gain. Can I save the tax in following way?
1) I have booked undercostruction flat in 2013 and would get possession in 2 to 4 months. Its full loan disbursal is not done. This last disbursement will be done before possession. Can I pay capital gain amount to builder and save tax here? (But capital gain is larger here than that of remaining payment to builder).

2) I have purchased ready-to-move flat in Nov. 2014. Full disbursal is done. Can I repay home loan from the amount of capital gain and save tax? (capital gain from selling NA plot can be fully utilized here.)

3) Can I save tax by use of capital gain amount in both the above cases simultaneously?

• Hi Santosh, You can claim deduction for purchase made within last 1 year of Feb 2015. So you can claim deduction for flat bought in Nov 2014.

I think if you pay the home loan from the amount of capital gain, you can claim the benefit as it should be treated as your Investment in House property.

22. I am impressed by the questions and advice given by you. I have the following querry, for which your advice is sought for urgently.:
I have an house built and purchased in 1973 at the cost of Rs.39,000/- then. It is situated in Aurangabad Maharashtra. Improvement by way of addition/expansion of the house in 1994 cost me Rs.1,25,000/-. Periodical maintenance had been done for which average cost per year since 1994 is Rs.2,000/- per year, i.e. Rs. 42,000/- by now. Now I intend to sell the house for which price offered is Rs.67 lakhs. Kindly guide me how much capital gains tax is due to me. To nullify the tax, I will purchase infra structure bond. Pl advice how much money is to be spent for these, and whether the infra.bond need to be purchased within a time period from the sale., and pl tell me about these bonds i.e. the rate of interest, full period of them and lock in period etc. Thanks very much for early response.

• I think below post will also be beneficial:
https://wealth18.com/how-to-save-capital-gains-tax-on-sale-of-property-in-india/

1) You need to calculate the indexed acquisition & improvement cost by applying the index for that year. Note that you cannot add periodic maintenance cost.

2) Capital gain will be sale price (minus) indexed cost

3) you need to invest the capital gain into Infra Bonds within 6 months. There is a Lock in of 3 years for such investment. The rate of interest is 6%

• Sir,
Thanks for immediate response. However, still following points needs advice from you.
(i) The improvement in the house is actually addition of two rooms at the expense of Rs.1,25,000/- in 1994. So whether this amount can be added to the cost incurred., and (ii) whether the present i.e.indexed cost of the total house would be (39,000 x 1025) + (1,25,000 x 1025/249). Your advice would be of immense use to me, specially for a sr. citizen running the age of 71. As per your advice (3) above, I will go for investing the capital gain in Infra bond within 6 months from accruing the sale value. It is for this, that I want to have the capital gains calculated under expert advice. Thanks once again. MRJ

• the addition will be added to the cost, but the indexation benefit will be taken from 1994 for this amount.

(39,000 x 1025) + (1,25,000 x 1025/249

23. Sir,
After Booking ready-to-occupy flat in Dec. 2014, its registration is done in Feb 2015. Total home loan disbursement is done today. In March, first pre-EMI (since complete month is not covered – as per Bank Officer) will be paid and First Full EMI will be paid in April 15 (in FY 2015-16). Possession is on 28th Feb 2015. May I claim income tax benefit on the interest paid (in preEMI that will be paid in March 2015) and interest accrued till 31st March 2015,in the FY 2014-15 itself. As per Bank officer I cannot do so because full EMI is not paid this FY. Is it like that? (Else, as I read earlier, interest in this FY will be divided in five eqaul installments from next next FY, is it right?). Please suggest me what should I do?
Thank You.

24. Sir,

I have a property which my dad bought on 1989 for 90000 INR. He passed away in 1994. So now I am planning to sell it for 1.5cr INR. What will be the capital gain? Will I have to remit Tax for the same? Can i keep the amount in bank?

25. Sir, i purchased a ddda lig flat for rs.1377000 inclusive cost of stamps on 22/2/2012 and sold on27/2/2015 for rs 2150000(stamp duty paid by purchaser on circle rate viz 3700000) how much tax will be paid by me

26. My grandfather had a shop in 1975 in pagadi system. After his death it was transferred to my father in 1993. My father expired in 1999 and in between the property went in redevelopment. A agreement was made in 1999 between my mother and builder for redevelopment. We got the possession of the new shop in 2002 which was in ownership. At that time we didn’t paid the stamp duty. We again made a new agreement in march 2012 and paid the stamp duty. Hence the previous agreement was cancelled. Now after 3 years from registered agreement I want to sell the property. Can u guide me which year index should I refer and what will be my cost price of the shop

• Hi Alpesh, As per income tax rules, the indexation will be taken from original year of ownership which in your case may be 1975.

However, you should consult a local CA or advocate to go through the ownership papers to check which year can be deemed as ownership.

27. I am trying to selll a property in Calangute, Goa and would like to find out the 1981 value – is it possible to get this directly from the panchayat? If not, what is the best way to find the 1981 value without emplyoing an accountant just yet.

• Check any local law book shop. there may be a ready reckoner which provide circle rates for previous years.

28. Hi. I had purchased property in 2009 june n sold in dec 2014 . So want to know index year wud be cou nted for purchase and sale year . 2014 _ 2015 or 2013- 2014. N purchas3 year 2008-2009or .

29. I had purchased a property in jun 2009 at registry amount 1925000 and sold in dec 26 2014 at registry 3200000 . In delhi . So want to know how much is the capital gain amot n cg tax whichI hv to pay .please advice n how much time I have to invest in other prop

• You need to calculate the indexed cost as per year 2009 & 2014.
Once the indexed cost is determined, reduce it from sale amount. That will be the capital gain.
You need to invest in other house within two year from sale of property else build a house in three years. Buyer can also buy a house 1 year prior to selling the house and still can avail the benefit under section 54.

If you cannot buy/build house till filing of return, then you need to put that money in Capital Gains Accounts scheme

See further details below:

https://wealth18.com/how-to-save-capital-gains-tax-on-sale-of-property-in-india/

30. Thank you for the response . That means purchase year jun 2009 ( 2009-2010)== index is 632
Purchase price registry amt is 1925000
Sale year dec 2014 (2014-2015)= index is 1025

Sale registry price is 3200000

To calculate :

1925000*1025÷632 = 31,22 033

3122033-3200000=77,966

Capital gain is 77966

20% tax =15 593

Is the calculations correct and

A )do I need to put rs 77966 or rs 15593 amount in cg account . I confused.

B)And how soon do I ned to file a return as the closing is nearin g this month I guess. Do I need to file or what ..

C) by which month do I need to put money in cg account if I dont intend to buy property

Thank you for the earlier response .

31. Hello,

My father bought a property in 1977 for 44,000 INR in Mumbai. He passed away in 1982 and we sold the property in feb 2015.

How do I calculate the indexed cost of property.

32. I need a help in calculating purchase value to estimate long term capital gain in the case of building a house in a purchased plot. In this case what records need to be maintained to prove the purchase value.

33. i construceted one house in 84-85 for rs 250000/-.i sold the same house in nov 2014 , for 300000/-.then in same month nov 2014 i purchaed one flat for rs 3200000/-at bangalore. how compute this in incometax during2014-2015

• i construceted one house in 84-85 for rs 250000/-.i sold the same house in nov 2014 , for 300000/-.then in same month nov 2014 i purchaed one flat for rs 3200000/-at bangalore. how compute this in incometax during2014-2015

• You need to apply the index for 84-85 & 2014-2015 to the purchase cost and then calculate the gain.
If the total gain is invested in new flat, then no capital gain is payable.

34. Thank u fr the response.

If im not sure a the moment wheter to biy property or not or maybe
. Thenif I put rs 77966 amount in CG acvount then I realise after a year tht I m not goi g to buy propetty then what happens to the amount .

Will i get tje amount along with intetest or certain % age tax wud be deducted. Please advice
I

35. Dear Sir,
I booked a apartment with private builders in Oct 2010 and opted construction linked plan, finally paid total payment and taken possession in Aug 2014. total amount paid Rs.36,00,000. Now I want to sale it in March 2015, please help me and calculate it’s indexed cost.
Thanks for great help to all concerns, requested for early reply.
With Regards

• Unfortunately, for the constructed properties, the date of acquisition will be take as date of possession. So the sale will be treated as Short term capital gain. No indexation benefit on STCG.

36. Dear Sir,
1) A property inherited by parents prior to 1980(some decades ago) and purchase price not known how to arrive at cost of acquisition of that property?
2) Just like Cost Inflation Index chart,whether Cost Improvement Index chart available? If available where from we can get the chart?
Pl.guide me sir.

0

37. Dear Sir,
1) How to arrive at purchase price of a property which was inherited by parents before 1980(some decades back) and from them by us whose purchase price is not known/on record.
2) Like Cost Inflation Index chart available to use for arriving cost of acquisition,whether Cost of Improvement Index chart available to use for arriving Indexed Cost of Improvement?If available where from we can get?
3) Does fair market value means govt.registration value?

• 1) You need to get a fair market value as on 01-4-1981 by registered valuer (CA , lawyers etc)

2) For arriving Indexed cost of improvement, you need to use the same Index chart.

3) Fair market value may be same as Registration value.

38. Dear Mr Jain,

As per CPI – Cost Inflation Indexation have got the calculation for Capital Gains on Sale of Property as Rs.5,83,826/-.

Sir, I want to know what will be Rate of Tax for Capital Gains. The Sellers – 2 in nos who are beneficiaries of the Sale Proceeds of the Property are aged less than 60 years AND do not have Annual Income above Rs.1 lac.

I will be grateful if you can kindly let me know the Tax Rate for payment of Capital Gains Tax.

Thanks & Regards

N Subramaniam
9831303081

• Lon term capital gain on property wil be taxed at 20%.

However, An Resident individual & HUF can claim the benefit of basic exemption limit from long term capital gain taxable u/s 112. However, you cannot claim deductions under chapter VIA from long term capital gain.

In you case, each person has capital gain od Rs 29193. You can add other income and then reduce the basic slab (2.50 lakhs) and on the balance amount pay tax @20%.

39. Dear Sir,
Is there any ceiling on developmental(improvement) charges to consider for cost of improvement of capital asset or actuals incurred can be taken for the purpose. Any standard procedure to calculate developmental charges.

Please guide me at the earliest.
Thanking you sir.

• Actual cost incurred can be taken But you should keep the bills in case of any scruitny.

40. Dear Sir,
1) Please clarify, to save tax on long term capital gain, investing in purchase of another house property the amount, equal to total amount of sale proceeds less (a) cost of acquisition and (b) cost of improvement of the capital asset transferred, is sufficient.
2) What is the meaning of “proportionate to the amount invested in relation to the net sale consideration”

Thanking you sir.

• 1) To save long term capital gain, you need to invest the entire Profit (capital gain).

2) In case you sell commercial property, you need to invest entire sale proceed to get the deduction. However, if you invest less than sale amount, you get proportional deduction. For e.g. If you Sale amount is 50 lakh & capital gain is 2 lakh, and you invest only 25 lakh (50%), you will get deduction of 1 lakh (50%). However, this is not relevant for sale of residential property.

41. Dear Sir,
Dialy I am opening your wealth18.com to see your clarification/ guidance for my 3 earlier postings on the matter.Eagerly awaiting for your guidance as financial year closer is reaching fast and income tax calculation for the F.Y.2014-15 should be done.
Thanking you Sir.

D.S.Rao

• Dear Mr Roa, Apologies. somehow your comment was missed as it was flagged by system automatically under different folder. I know it is too late, but I have now replied to yoru original queries.

42. To Shri Vivek sir. I sold my property on 10-2-2015 for 20 lakh which I had purchased on 18-1-1974 for ten thousand Rupees . How to calculate long term capital gain.? How much tax to pay?

• Hi Shoaib, You need to get a fair value as at 1981 and then calculate the Indexed cost.

Assuming the fair market value was Rs 10000, then indexed cost will be 10000/100*1025 = 102500
Capital gain = 20lakh – 1025000 = 18.975 lakhs

Long term capital gain on property will be taxed at 20%.

43. Dear Vivek, my father bought a plot in 1960 and constructed a house on it. I and my brother are the beneficiaries since 2005 when my dad passes away. Now we want to sell the property and I want to take the proceeds from the sale abroad as I am an NRI But my brother is in India. Since there are no indexation tables from 1961 to 1981 how can the indexation work and what would be my tax liability? Can I repatriate the money abroad? My dad paid around Rs 5000 for the plot and spent around 25000 on construction. The current value of the property is Rs 40000000. Thanks in advance.

• Hi Manjit,

1) You can get the property valued for cost as at 1981. you can get a valuation report from a registered valuer
2. you can then index the value to year of sale and calculate the capital gain.
3) You can get the money into your NRO account and then repatriate to foreign account. Alternatively, your brother can get all the money in his account and then transfer money in your foreign account.

44. Dear Sir,
27-03-2015.
Humbly request you to look into my queries.
Thanking you Sir,
D.S.Rao,

• Dear Mr Roa, Apologies. somehow your comment was missed as it was flagged by system automatically under different folder. I know it is too late, but I have now replied to yoru original queries.

45. Dear Vivek Sir,
In FY 2014-15 I am in possession of one flat. Will get possession of second flat in April 2015 (FY 2015-16). Both of flats will be rented out as I stay in company rented flat in all together different CITY. By seeing the interest will be accrued for these both flats I want to take benefit of interest repayment for both the rented flats. For one flat IT section applied is u/s 24. Under which section I can take benefit of interest repayment (without any limit ?) of second house property? Company account section is asking me IT Act section number for the same. This I came to know from calculator on Income tax Dept website. But this does not give section number. I could not find it anywhere exactly. Please guide me.
Milind

• As per Section 24(b), you can claim deduction for amount of any interest payable on capital: where the property has been acquired, constructed, repaired, renewed or reconstructed with borrowed capital. So for both the rented property, you need to show the annual rent as Inccome and can claim
1) 30% Standard dedcuction and
2) full interest paid.

46. Dear Vivek my father gifted me a residential property which as per 1981 valuation is for 4.93 lacs. I sold the same in second week of March 2015.for 225.8 lacs. I am buying 2 houses for 90 lacs and 67.5 lacs while calculating ltcg 1) can I get the benefit of both the houses 2) will it be total amount spent Iin buying 1 or 2 houses or the% of total sales value? Further please advice that the money spent on registration of gift deed and registry of new houses purchased will be added to cost of accusation

• Registry for new house will be added to cost of acquisition.

The condition for claiming capital gain exemption is that you should not own more than 1 house at the time of investment. So you will be able to invest in 2 properties to claim deduction.

47. hi vivek,
I have purchased RURAL AGRICULTURAL LAND in feb 2012 for 1.75 lacs and sold in April 2015 for 3.5 lacs. (hold land more than 3 years)
so does capital gain on RURAL AGRICULTURAL LAND is taxable? or 100 % tax exemption on RURAL AGRICULTURAL LAND

Thanks,
Ashish……….

48. hello vivek,
I have purchased RURAL AGRICULTURAL LAND in Feb 2012 for 1.75 lacs and sold in april 2015 for 3.5 lacs ( hold land more than 3 years ) so capital gain by RURAL AGRICULTURAL LAND is taxable? or do I need to invest this money again in land or not?

Thanks and Regards,
Ashish C

49. Dear Mr Vivek,

I have sold my residential house in Ghaziabad and planning to invest the same in Noida in plot (land). This land has completion certificate that means two temporary rooms have been built and certificate has been issued by Noida Authority. Will this save me from LTCG or will it be treated as investment in land and I will be expected to give tax? Kindly help…

• Hi Rajeev, If the property is registered as Land and not the residential house, then I think you cannot claim the benefit. It is better to re-confirm with a local CA/ property advisor.

50. I purchased a plot in Asangaon in 1997 for Rs 1,13,000 in 1997. Discussions are on to sell it at Rs 20,00,000 to a promoter. Will be really grateful if you can advise me on the capital gains taxable amount computation, the tax payable etc.

• Hi Prabahakar , as of now Cost inflation index for fy 2015-2016 is not announce.Once announced you can calculate accordingly.

Indexed cost = 113000 X 331 / 1025 = 3.5 lakhs
capital gain = 20 – 3.5 = 16.5 lakhs

51. Dear Vivek,

My query was stated to be under deliberation for almost a week to ten days. It has since been taken off without a reply.

Regards

Harbhajnik Singh

• Hi Harbhajnik,

Your query is pending and its reply is under process. Apologies for the delay.

52. Hi,

I am confused as I hav to pay cg tax against property.
Where do I pay cg tax . Is it the same ay we pay income tax or property tax thru agent in delhi . Pleaseadvice

• Any capital gain from the sale of property shoudl be added as Income in your Income tax return.
And then you need to pay Tax on total income. You can file challan 280 for paying Income Tax.

53. sir
i bought a 700 sq.ft flat from tamilnadu housing board during 1979 and we are 18 allotees with total land area 22658 sq.ft. uds for each comes to1258.78 sq.ft. the cost ofthe flat 56,150 including stamp and regn.now 2015 we are going for a joint venture. we are selling 385 sq.ft each to the developer in turn he gives 1500 sq.ft super built area flat(20% common area))
and good will money 20 lakhs. and monthly rent 25000 for 18 months. during 1997-98 we have extended/improved our flat at a cost of 1,35,000.
now in our k.k.nagar,chennai the construction cost is around 2000/sq.ft.
kindly let me know how to calculate capital gain tax.
thanks and regards.

• Hi, Apologies I am not sure about the calculation in such case. It is better to consult a local CA in your area.

54. Mr.Vivek, my father purchased an apartment flat for Rs.1,50,000/- in the year 1994, now we want to sell the flat .Government price is around Rs.15 lakh , market price is Rs. 22 lakh, the buyer wants to register with market price.My question is how much capital gains tax is to be paid, will there be any problem with tax authorities off selling it in market prices.

• There is no problem in selling at price higher than circle rate.

Indexed cost = 150000/259*1025 (CII for FY 2015-2016 is not yet announced) = 6 lakh approx.
Capitla gain = 22 lakh – 593629 = Rs 16 lakh approx.

55. I am accruing capital gain by way of sale of ancestral property, can I invest proceeds accrued in a residential plot within one year of sale of original asset and later construct it within a period of 3 years from the left over amount that I am required to keep in Capital gain account scheme. I utilized some amount from sale of original asset to construct one floor on my existing (sole) residential house, can I claim deduction from capital gain for this amount also.

• H Gaurav, If you cannot invest all the required amount, you need to deposit that amount in Capital Gains Scheme Account. You can later withdraw money from that account to construct the house.

56. My father has acquired an ancestral commercial shops property older than 1970 and sold it in May 2015 for 7500000.
How to calculate the capital gains, and if we have an existing loan on my fathers name on a different commercial property can we deduct that amount from capital gains?
Also pls guide how we can save the capital gain tax?

• 1) You need to get it valued for 1981, and then apply the cost index as per above table to calculate the Indexed cost and thereby Capital Gain.

2) You cannot deduct the existing loan on different commercial property from capital gains.

For Saving Capital gain, you need to invest the ENTIRE SALE Amount (not only Profit) in a residential property or you need to invest the Capital Gains (Profit only) into the Capital gain Bonds.

Check the post on saving Capital gain tax
https://wealth18.com/how-to-save-capital-gains-tax-on-sale-of-property-in-india/

57. Sir, I purchased an apartment in Dec 2009(possession received) for 35 lac s and selling now in June 2015 for 57 lacs. There is a capital loss. Will the buyer have to deduct Tds as amount is greater than 50 lacs though there is a capital loss. Please advise. Thanks.

58. Sir,
Apologise for this. Another follow up question.
1. Does the TDS to be necessarily deducted and proof of payment to be shown at the time of registration of property. Can the registration happen without TDS being deducted?

Thanks.

• The TDS proof is not required for registration. However it is buyer’s responsibility to deduct TDS if the sale amount is more than 50 lakhs

59. Mr Vivek Jain,

I had bought a plot in May 2004 at a cost of Rs 7,96,909 + Rs 82275 (registration cost) by taking a loan of Rs 6,10,000. Now I have paid off the loan and total interest I paid is Rs 5,76,650. I am owning a flat bought with a loan and my wife is the co-applicant for the loan in 2008 ( occupied in 2011). I am a tax payer in 30% slab.

If I sell my plot I may get Rs 75,00,000 and I would like to use that money partly for my daughter’s marriage` and rest would like to deposit in a bank to get interest. How much I have to pay the tax due to the gains? Indexed cost of acquisition to be calculated on Rs 7,96,909+82,275+5,76,650 or 7,96,909+ 82,275 ? Please suggest how I can optimize my savings after paying the LTCG tax. Thanking you,

• Hi,

Your indexed cost will be approx. 19 lakhs (based on 796909+82275) and if you sell it for 75 lakhs, the capital gain will be approx. 56 lakhs.

To claim the tax benefit, you can invest the capital gain in either residential property or invest in capital gain bond (upto rs 50 lakh).

60. Also please clarify, how the money deposited in Fixed deposit under CGAS will be taxed at the time of withdrawal after say 5 years?

• You will have to manually add that as Capital Gain Income when filing the income tax returns.

If you want to close this account, you need to apply using Form ‘G’ along with the approval of the Assessing Officer with the Pass Book/Deposit Receipt. Deposit office shall pay the amount of balance including interest accrued to depositor.

61. Dear Vivek,
my father baught a plot in my mother’s name in 1998 and now wants to sell the same (during the purchase cash payment was done approx 2.5 lac). now its sale price is approx 60lacs.
request you to share some guidelene to pay minimum possible tax or avoid paying any.
pls also note that this income is going to be distributed among our four brothers, i am working with pvt mnc and regularly file ITR, other bros doing some samll scale businesses.
ehsan

• Hi Ehsan,

If the plot is solely in the name of your mother, she will be liable for capital gains tax and need to file the returns.

You need to calculate the capital gain based on the index for both years – see above post for calculation. You need to take amount mentioned in the deed (you cannot include cash payment done)

For saving capital gain, you need to invest in residential property or capital gain bonds. See below post:
https://wealth18.com/how-to-save-capital-gains-tax-on-sale-of-property-in-india/

It doesnot matter, whether she gives the money to you & brothers, she will need to pay the capital gain tax.

62. Sir, I purchased a flat at Rs.1.00 lakh (as shown in deed) in 1990. Recently in the current month I sold the flat at a sales consideration of Rs.22.00 lakh. What will be my capital gain and how much amount of tax I have to pay. What are the other sources to save capital gain tax. Olease advise.

63. How do we know the purchase price of ancestral property purchased/built in 1960’s.Please guide

• You need to get the fair market value in 1981 through any registered valuer ( CA, lawyer etc)

64. Sir,
I’ve booked a land in 2005 on Installment basis. Full & final payment was made in Apr-2010 and I got the possession of the land in Apr-2010. I sold the land in July-2015. Pl. let me know which year will be counted for the Index (2005 or 2010)?
Best Regards,
R. Chatterjee

65. Hi Vivek,

I am selling my ancestral property and seems like the capital gains is Rs. 1.5 crore. Am I allowed to buy more than one house or property with the capital gains ? Please clarify. Thanks.

• You can claim capital gain deduction for investing in residential property. The condition is you should not hold more than 1 property at the time of claiming exemption.

Which means, if you don’t have any property in your name, then you can invest in max 2 properties.

• my mother is 61 yrs old. she had sold her house last month june 2015 for Rs. 82,00,000. she had buy that house in 1984 for Rs. 1,50,000. property was in mumbai. Will you please calculate the capital gains on this? I also want to know she can purchase 2 property on her name at different location in mumbai

• Hi, Cost inflation index for FY 2015-2016 is not yet declatred. Assuming it will be around 1120

Index cost = 150000/125*1120 = 1344000
sale prioce = 82 lakks
capital gain = 68,56,000

If she doensot have any property in her name now, then she can invest in 2 properties.

66. Dear Sir,
I booked a flat in feb 2010 and paid some token amount. The allotment letter was issued to me in oct’10 and payments were made to the builder as per demand raised by the builder. Some amount was paid in 2010-11, some was paid in 2012-13 and some amount was paid in year 2013-14. I sold the right in Jul’14. Which year I should consider for indexation. 2010-11 when the allotment letter was issued or for every payment made to builder year of indexation of that part will depend on when the payment was made.

67. Dear Sir,
Greetings of the day..!

My mother got property by inheritance, whereby after the death of her father in 1982 and her mother in 2006 by WILL. now we plan to sell that land 1 acre by converting into 22 sites of 3.25 cents approx each costing 7.5 lakhs each site, so total amounting to 165 lakhs. since this is an 100 year old property, how to compute capital gains and adjust tax. please suggest me.

thanks and regards
sundarrajan

• You need to first get a Fair market value of that property in 1981. You need to take help of local CA/ lawyer for that.
Once you get that , you can calculate the capital gain using the index above.

Also, note that you should file return as well in the year of sale. IT department may treat it as Business Income as you will be converting it into site and selling them..

68. Mr. X owns a piece of Land admeasuring 85 cents in Ernakulam
He is ready to sell the above piece of land
M/s Y is a real estate company submitted 3 offers
Offer1. @13 Lakhs per cent they will complete the transaction in 12 Months time. Say in Oct 2015 a sale deed executed with paying 5crores and rest of amount say 6 crores clearly mentioned in sale deed with first charge the above said property and on or before Oct 2016 the transaction is completed and Land owner has no further right and the builder got full right in property.
What is rules existing for the above case for LTCG? When this payments to be accounted? In FY 15~16 or FY 16~17?

• Hi Antony, based on the details provided, it seems that the transaction is complete in FY 2015-2016 (Oct 2015) and just that balance money will be received in 2016. In such case, full capital gain will be in FY 2015-2016

69. For a JV with builder, Landowner receives his share on booking of the flat and on completion of Building he registering the ownership share to individual flat owners. This process takes 30 months. How the LTCG portion is accounted in different years and part by part?

• Hi Antony, there are lots of different case laws in this area depending on specific circumstances.

The LTCG liability time will depend on the details of agreement with the builder. Whether the amount received at the time of booking is iust an advance etc. Most likely the LTCG will be applicable in the year of giving final possession.

70. My father has given me 1 acre of agricultural land valued at ten thousand ( the market value was about 2 lacs) in May 1986. I have got Govt permission and converted it as residential property. Now a builder is offering to build flats as joint developmenmt. The agreement takes place in july 2015. As consideration I will be getting Flats worth 10 crores in March 2018. Now please let me know
a. What date will be considered as the date of sale of my landed property, and any tax liability at that time?
b What date will be considered as the date of the aquisition of the Flats

b. WHAT IS MY TAX LIABILITY,
1. If, I sell all the flats for 10 crores, before 3 years from the date of sale
2. If, I sell flats worth 5 crores, before 3 years of sale, and the rest after 3 years
3. If, I sell all the flats worth 10 crores, after 3 years of sale and
4. If, I do not sell any and retain all the Flats in my possession itself

c. HOW CAN I GET TAX EXEMPTION IN ALL THE ABOVE CASES.

• Hi Anjani,

It will all depend on how the agreement is drafted. there are many case laws related to joint development or builder construction with landowner etc.

As the amount is also large, I would suggest you to take help of local CA/ lawyer to draft the agreement keeping in mind the taxation aspects as well.

71. Dear Sir,

I purchased a residential plot in Zirkpur Punjab in January 2005. I sold it on 16 May 2015 . My capital gain is approximately Rs 10 Lacs which I am investing in REC/NHAI Bonds before 15 November 2015.
May I know when to reflect this transaction in the ITR. Do I have to reflect it in the ITR for AY 2015-16 or in ITR for AY 2016-17.
I’m about to file my ITR for AY 2015-16 hence I will be grateful for an early response.
Regards,Col Anand

72. Dear sir, I have a piece of land purchased by my father in the year 1964. Now i am getting an apartment constructed by a promoter and will receive my share in shape of flats and shops. Please let me know how the income tax will be calculated in this case.

• You need to get the fair value of these flats & shops from a registered valuer, and then calculate the capital gain accordingly.

73. HI,
I have purchased a flat in 31.08.2010 , agreement value 26.00 lacs, another 3,00,000/- expend on stamp duty and Registration as well as cost of Electricity and insurance.
In 2012, I expend Rs 150000/- for flooring and water proofing
I sold flat on 05.09.2015 for Rs 56,00,000/- what will be my capital gain and what amount I have to invest in new flat to avoid capital gain tax payment.

• Hi Anand, Have you tried calculating based on the post above.
You can use the index for the year in which payments are made.

74. Sir,
Can I assume my capital gains tax is nil if my sale price is lower than my indexed cost of the flat. Thank you.

75. CAN WE DO VALUATION FROM INDEPENDENT SURVEYOR AS ON 1.4.1981 FOR MORE THAN 100 YEAR OLD ANCESTRAL RESIDENTIAL PROPERTY WHICH WAS SOLD IN NOVEMBER 2015 …..

• Hi Pavan, yes you can do that. You need a fair value as at 1981 to calculate the indexed cost.

76. Hi Vivek
I am a senior citizen. I, along with 3 siblings inherited some property from my parents. The property was bought before 1981. We had the building demolished subsequently. so it was only a vacant site that we sold. Could you please advise :
1. What are the tax implications for me.
2. Will indexation apply in our case.
3. What all can i do to save tax.?
Hoping to hear soon from you. Thanks you so much. Regards
Kalpana

77. I had purchased a Flat in 1992 Dec for Rs. 3,50000/- in Visakhapatnam and Sold the Flat in 2015 May for Rs. 19,50000/-
I had opened a Capital Gains FD account in Andhra Bank Bangalore and Deposited the Sale Amount of Rs. 19,50000/- in it . I also opened an S.B.A/C under the Capital Gains A/c and requested the Bank to deposit the Quarterly Interest in this SB A/c.
I am searching for a RESALE PROPERTY for Rs 29.00 Lacks.

How much Capital gains Tax I need to claim Exemption if i could register the Property within two years say May 2017? How to draw the Money and pay to the Owner of the Resale Flat in Bangalore for Rs. 29.50 Lakhs [ All inclusive cost of the Flat =27.00 Lakhs + registration 2.50 Lakhs] What is my commitment of Tax Liability ?

• Hi Sreenivas, You need to calculate the capital gain tax as per the table & example above.

As the new property is for 29 lakhs, it will cover your capital gain amount, so no capital gains tax will need to be paid.

Regarding the property purchase, you need to apply for the amount to be released from capital gains scheme. The cheque will be provided in the name of seller.

78. Hi…

My mother purchased land 30X40 size in 1984 & constructed home in 1989 by investing 2 lakhs.But no documents for 2 lakhs investment.Now in 2016 we sold it to 12.8 lacs.How much capital gain tax i need to pay or not..Plz suggest

• Hi Raghu, Please use the example in the post above.

You can calculate the indexed cost, based on inital land purchase and the contruction cost.

79. The amount paid for the registration of the property can be included in the cost of the purchase of the property while calculating capital gain using index provided ?

• Hi Pankaj, Yes you can include the property registration amount in the cost of acquisition.

80. Hi Vivek,
I have gone through this post but still have little doubt about date of acquisition. I booked and payed 100% (40L) amount to builder in 2007 for my flat and after construction he gave possession of the said flat in 2012. I couldn’t get the registry done at that time and now I have got the registry done. So my query with regards to capital gain computation as I plan to sell it for (85L).
1) Whether 2007 or 2012 would be considered as date of acquisition.
2) Can I include chargers for woodwork etc and maintenance charged paid over the period of 3 years in cost of acquisition?
3) To compute and proof I indeed made those expenses would I need a CA to compute all this?

Aqueel

• Hi,

1) As full amount was paid in 2007, you can consider 2007 as date of acquisition

2) No such charges cannot be included in the cost of acquisition.

81. Dear Mr Jain,
Seeking your valuable advice on the following regarding implications of section 54 of ITA.
I invested the entire sale proceeds of an apartment(A) on a villa under construction( B) in 2013. ( this included long term capital gains of about 40 lakhs.) Agreement to sell and construction agreements of B were dated July 2013. The property is still under construction and hence possession is yet to be taken.However the entire cost of Rs1.5 crores have been paid to the builder over instalments ranging from May 13 to Sep 14.

Now I propose to sell the villa before completion of 36 months to reinvest in another residential property. What could be the tax implications if
A. I sell at cost ie without profit
B sell with profit
C. Sell after 36 months from the dates of agreement to sell and construction agreement.
Krishnan

• Hi Krishnan,

1) If the new house is sold within three years, the deduction claimed will become taxable as a long-term gain.
2) if any additional house (other than the new residential house referred above), is purchased within a period of two years or constructs within a period of three years after the date of transfer of capital asset, then the original exemption will be taxed as capital gains in the year in which the additional residential house is acquired

So I think you should consider option C as per your query. But the challenge is the 3 year clock will start again once the posession is done. You will have to wait for 3 years from posession date.

82. Dear sir,
I have a query in regard to the sale of under construction flat.
Date of booking – jan 2012
Agreement – July 2012
Plan to sell – march 2016
UDS not registered
I understand that this scenario falls under capital gain tax.
After indexation, there is a profit of 2 lacs.
I would like to know i will be taxed 20% on this profit of capital gain of 2 lacs after indexation or the entire transaction as the UDS is not yet registered
Thank you

83. Dear Sir/Mam

I have booked SECOND house in January 2014. Registration & Physical Possession of SECOND HOUSE have been completed in March 2016.I have sold a plot in March 2016. This Plot was purchased in September 2011. My question is Long term capital gain tax on sell of Plot would be exempted as i have registered second home in March 2016 itself. I mean Purchase of second property will be counted from date of booking (Date of Builder-Buyer Agreement) or date of Registration and Physical Possession? If it is counted from Date of Registration then i will be saved from Capital Gain Tax.

• Hi Shaheen, There is no clear guidance from Income tax department for cases where people are investing in unfinished property. As they book the property in different year, then pay money over years and then take possession and registry.

In my understanding, you can claim the capital gain benefit as you have taken the possession and registry in 2016.

84. Dear csaSir,

I have purchased the site on 27/1/1993 for Rs. 18,000/- as per the
I have constructed the
house during 97-98 the total cost
of the house Rs. 620130
Now sold the house for
49.5 lackh.
How much I want to invest in
CAPITAL GAINS ACCT.

• Please calculate the capital gain amount using the cost & index rate for 1992-1993 & 1997-1998 and current year.

85. After calculation the capital gain is Rs.10,49,475/- on long term, then in which form I have to use for filing the return of income, the assessee is Individual.

86. I bought a house from in 1986 from LDA. In 1987, I further constructed on it. I have the figures as they were spent then. Since amount was paid in cash and in instalment at regular intervals, I do not have a record but only hand notings. If I sell the house, How do I then calculate the total cost of the house.

Asif

• Hi Asif, You need to calculate the indexed cost using the indexation in the year of investment and further spendings.

If you donot have the proofs, then there may be problem in case of any income tax scrutiny.

87. Sir
our property was purchased by our grand father in 1921 & 1931 and presently inherited by 5 brothers and 2 sisters at Vijayawada in A.P. what would be the procedure to calculate Capital Gains tax? property area 450 yards. Present rate is approximately Rs. 80000 per sq. yard.

• You need to get a fair market value of property in 1981.
Then calculate the index cost of the property as per chart and example above.
Then calculate Capital Gain = Sale value – Indexed cost . As it is owned by 7 people, then you will need to divide the capital gain by 7 for each person.

88. Hi, thanks for your lucid & self explanatory tables and example but I will still request a reply to my query which I am unable to solve. Last fy 2015-16 we all stake holders sold our inherited , ancestral property for Rs 4.5 cr. with proportionate share for us all . Property was purchased in 1931 for Rs 3.0 lakh. How much , if any , does our combined capital gains works out to be.? Thanks. Ashok.

• Hi Ashok, You need to get a valutation done regarding the property value in 1981. The apply the cost inflation index as per example above.

89. Sir, From the tables of capital gains cost inflation index , it seems that in last 34 years , from 1981 , cost has only increased 10 times( from index of 100 in 1981 to just over 1000 in the last FY). Is my interpretation correct ? Thanks. Sunota.

90. whether cost of furnishing/repair will include cost of actual purchase in case of purchase of semi finished house from housing board

• If you have spent large amount in construction or major repairs, then you can claim that as cost. Normal repair and furnishing etc is not allowed.

91. My grand had a plot which has been valued by authoised valuer of rs 4.5 lac now i want to sell half of the flat at rs 40 lac. Initial value comes out to be 2.25 lac which on indexation becomes around 10.8 times i.e 24.3 lac now it is being sold at 43 lac. So capital gain of 18.7 lac. I want to know that the valuer has taken into account the construction in year 1981. But alot of amount was spent on maintenance on the said property where to show this coat while calculating capital gain. What ia thw maximum limit for such expenses.

• Hi Dinesh,

Normal maintenance cannot be included. However, if you have spent high amount for extending the property or building something new, then you can include that in cost and index based on year in which such cost was incurred.

92. 1.I purchased an apartment for Rs.10 lakhs in 1994-95 period. I do note that the indexed cost in 2016-17 period would be 10,00,000×1125/259 = Rs.43.436L. Am I correct pl?
2. I had done some woodwork & other items during 1995-96. Can I add the indexed cost from 1995-96 to 2016-17 to this. Shall appreciate your confirmation or otherwise.
3. I have done some additional work/replacement work during course of last 22 years-(i) Rs. 60,000 during 2004-05 for toilet redoing/refurbishing, (ii)Rs. 50,000 for changing flooring in hall during 2014-15. Can the cost these two items be added after indexing from respective years.
4.I have done periodical anti-termite treatments for whole flat. Are these cost can be added to indexed cost?
5. How about painting cost incurred three times during last 21 years.?
I would be grateful for your guidance on these points.

• 1. Yes
2. You can only use any major works that significanlt add value to the property e.g. bulding another floor, building a new bathroon etc. Normal furnishings cannot be added.
3. refer2 above. Only “Capital” costs can be considered and not the normal day-to-day costs.
4. No
5. No

93. i got a residential plot 7200 sqft in the year 2003 by way of gift from father registered in the settlement deed with market value of rs.1,20,000. now i want to sell 2000 sqft of plot with a joint venture with the builder at 50 50 sharing basis. in my share he built 1900 sqft of buildup construction area G+ FF is going to complete. now i can sell my part of individual house @ 80 lakhs ( land value 20 lakhs plus building 60 lakhs ) what is the tax impact on my part of sale can i avail tax exemption

• Hi Guna,

I suggest you speak with a local CA to go through the actual agreement with builder etc for joint venture. As the tax computation may be complex.

94. Sir
My MRI relative had an ancestral house in Gujarat. The same was demolished in 2010 and rebuilt in 2011. Now he wants to sell it. How should he calculate ltcg

95. Dear sir,
The indexation chart starts with 1981.
Say Rs100/- in 1966 value to. be taken as what for 1981.Any ready reckoned available.
Thanks
Ranga

• Hi Ranga,

You need to get the valuation as at 1981. You need to go to a registered valuer (CA, lwyer etc) to get such valuation.

96. Dear Sir,
Can we use the same Index when sale of Plant of Machinery or is there a different Index, if so please let us know.

97. Sir,
as now base year of indexing has shifted from 1981 to 2001, i wanted to ask my case
I have purchased flat in 2007 feb 2007 @12 Lacs and sold it in apr 2017 @35 Lacs. Now how to calculate the capital gain and tax on it?

• Hi Harsh, Nothing changes for you. It will only impact people who have bought property before 2001.

You just need to use th eindex for 2017-18 and index of 2001-2002.

98. Sir,
Purchase price of our flat at Pune for the F.Y. 2012-13 for purchase Rs. 4800000/- & those flat will be sale out F.Y. 2017-18 for Rs. 6200000/-. Plz calculate the long term capital gain to us as early s possible.
thanking you

• Looks like you will have capital loss instead of capital gain.

Indexed cost = 48 lakhs *1170/852 = 66 lakhs (1170 is estimated CII for FY 2017-2018)
Sale: 62 lakhs
Capital Loss = 4 lakhs.

99. Dear Blogger,

I have heard somewhere that a new rule is published by central government and now Cost inflation index is calculated from 2001 instead of 1981 due to which any property bought before 2001 needs to be assessed by a govt approved assessment authority.

Regards,
FK

100. please intimate me the the index value of payyanur town area ,taliparamba taluk,kannur district,kerala for the base year
01.04.1981

We sold our property in name of my mother after she passed away and money was divide d equally among 2 brothers. Out of my portion I immediately bought a property by adding some more amount and half is with my brother. Now can you please help me how the capital gain will be levied and calculated .
Do we both need to pay or only for the leftover amount with my brother vil be taxed only.
Property sold in 2017 and was acquired long back in 1990s.

Thanks
Rahul

• Hi Rahul, after your mother, i am assuming the property is divided equally between you and your brother. So capital gain will be applicable for both of you.

Now for your share, you can claim exemption as you invested in new house. But your brother will need to pay capital gains tax based on the profit he has made on the property.

102. Hi,
I’ve purchased a house with land back in 1996 which cost me 12 lakh back then. Now that the base year has changed from1981 to 2001, how do we calculate the capital gains? The 96 – 2001 appreciation gets lost? The value of the sale is the same in both years?

• Hi Shuba,

The appreciation is not lost. You need to get the fair market value of the house in 2001 and then do the indexation.

Capital Gain = Sale value Indexed cost

Indexed cost = Fair Market value in 2001 X Index rate in Sale Year / Index rate in 2001

103. Hi, I sold a property which was bought by my father in 1974. However I don’t know the purchase price. How do I calculate the Capital gain?
Also how do we arrive the value for indexation as it starts from 1981

• Hi Mitesh, As you new rule, you need to get a fair market value as in 2001 and then calculate indexation from there.

You can get in touch with local lawyer / CA (Valuer) who can help you.

104. Sir , I have an ancestra agriculturall land occupied by my forefather in 1945 . Now I am willing to sell this land as residential plots approved by developmental authority. is there any tax liability how can I save tax?

• Hi Vivek, If the land is classified as ‘agricultural land’ within Income Tax Act, then gains arising from its sale will not be taxable in your hands. The exempt gain will need to still be disclosed in income tax return in the Exempt Income (EI) schedule.

However, it looks like it is no longer an “Agricultural land” and converted into residential and you may not be able to claim that benefit and may need to pay capital gain tax.

105. Dear Sir

Please guide me on the Capital Gain Tax to be calculated on the house property, which was sold recently. The details are as below:

My father had bought on lease a plot of land in 1987 for Rs. 68927/-
He started constructing a House in the year 1991 and completed in February 1992 at a cost of Rs. 156000/-
He constructed the first floor in the year 1997 for a cost of Rs. 185000/-
He died in the year 2013.
As a legal heir, my mother inherited the property in February 2015.
The property has been sold in the November 2017 for a value of Rs. 34,00 000/-
During the period between purchase and sale we spent an amount of Rs. 500000/- towards period maintenance and taxes.

Now I would like to know:
Whether the proceedings will be counted as LCG or SCG, particularly when the property was inherited by my mother.
What will be the CG Tax in either case.
My mother is a family pensioner and draws a monthly pension of Rs. 16000/- PM.
What will be the overall tax liability for the FY 2017-2017

106. Hi Vivek,
Need your help to understand the tax liability in my case

I booked a flat in Aug 2009 by paying a booking amount of 1 Lakh. The allotment letter was issued in Oct’2009. The total basic cost of flat is 29 lakh plus 5 lakh of other variable cost of PLC, Parking etc. 90% payment of basic cost was paid by 2013.

Possession was given in June 2016. Now, If I sell this flat at say 50 lakh today , what would be the tax liability (short term/long term capital tax gain) and what would be the benefit of indexation in my case

• Hi Rohit, This area has always been discussed and there are different views.

1) Some expert will treat the possession date as the date of acquiring date. In this case it will be June 2016 and if you are selling now, it will be treated as Short term capital Gain.

2) Some expert will argue that once the full payment is made, the asset is yours. In this case it will be 2013 and if you are selling now, it will be treated as Long term capital Gain and you can claim indexation from 2013.

3) Some expert also have the view that once you received the allotment letter, the asset is yours. In this case it will be Oct 2009 and if you are selling now, it will be treated as Long term capital Gain. You can claim indexation based on amount and individual period in which you made the payment.

107. Purchased residential plot for rs 20000/- in year 1987 in Bangalore..now I am selling this plot for Rs 7200000/-
How much capital gain tax I requires to pay.
I m retired person.

• Hi Prashant, First you need to get the fair market value of the property as in 2001 and then apply the indexation chart to calculate the indexed cost. You capital gain = Sale price – indexed cost.
You can also save the capital gains tax using one of the options mentioned in the post above.

108. Sir ,please guide on FMV ,a dda flat bought in 1979 for 74000 being sold now in march 18 for 1.1 cr. there were some other expenses on the way like interest on loan and conversion to free hold ( say 5000 Rs) . now what FMV of the flat can we take for base yr 2001 for applying new CII table for LTCG calculation. and what is the bonafide method for that . thanks a lot in advance

• You need to get the FMV of the property as in 2001. There are various options listed in the post above to get the FMV.

109. I constructed a single story house in 1986-87 with a bank loan of Rs 1.25 lac plot was purchased for Rs 52 thousand,The estimate of construction submitted to Bank was Rs 145422.00, it took 12 months to complete the project by the end of March 1986 with total cost Rs 2.70 lac, again in year in year 1997 I took loan of Rs 3.75 lac for raising second story on the same project it cost 4.00 lac to complete this second stage, I am going to sale my house in June or July 2018, Can you help me to calculate the cost index based cost

• Hi Vinod, the base year for indexation is changed to 2001 now. So, you need to get the fair market value of the property as on 1st April 2001 and then perform the indexation to calculate the capital gains.

110. Sir,

My mother had a property on lease for 30 years but converted to free hold in 2009 by paying Rs 450/- only. Now she sold it in 2017 for 8 Cr. This amount was divided in 4 equal parts among siblings. From my share of 2 Cr, I purchased a flat for 1 Cr. For remaining 1 Cr, my CA says we have to pay Capital Gains Tax @ 20% as the cost of the property is just Rs 450/- (cost of previous owner). Six months have passed so I can not invest in Bonds also. Please suggest a way to save this 20% on 1 Cr.

• Hi Ajay, When the property was on lease, did your mother pay any lump-sum amount for the leasehold? Also, when the property was sold in 2017, who was the owner of the property? Was it your mother or all 4 siblings? If the property was only owned by your mother, then the tax liability is only on her for the full amount. The amount received by siblings may be just gift from her or inheritence. So , it is important to understand the ownership of property at the time of sale.

• Sir,

My mother paid an yearly rent of about 20-30 Rupees while the land was on lease till 2009. When it was converted to freehold – she paid the required fee of Rs 450/- only. Just before the sale happened in 2017, the property was registered in the name of my mother and my 3 siblings. So the sale proceeds got divided in 4 parts of 2 Cr each. Also please note that my Mother expired on 9th April 2018.

• Hi Ajay, In that case, yes you will need to pay capital gains tax on the balance of Rs 1 crore.

111. Date of Purchase of property – September 2, 199
Purchase Price = 410000
Date of Sale – September ,2017
Sale Price – 23,00,000

Can you please let me know the Capital gain tax liability

• Hi Sneha, You need to get the fair market value of the property as on 2001. You can then use indexation to calculate the indexed cost and capital gains amount.

112. Hello sir
My paternal Property whose cost in 1970s was too small and also not documented .
In the year 2018 we have sold it..but clueless about the capital gain tax

• Hi Gautam, You need to get the fair market value of the property in 2001 and then calculate the cost indexation . Based on that, the capital gains will be calculated.

113. Hi, Sir,
I have purchased a house in 1991-1992 with @ cost of Rs. 3,50,000/-(Land dastavej Rs.38,000/= and Construction cost for Ground and First Floor Rs. 290000/= and other legal charges). I sold this house in Rs. 4200000/=(Paid Rs. 80000/= Brokerage) in March 2018. I have purchase one flat in Rs. 2400000/=(Stamp duty and legal charges Rs.180000/=) in 1st Aug.2018. Please let me know about my Capital Gain tax, and if I am liable for any capital gain tax, is it possible for me to invest that amount in Capital gain bond or I have to pay tax only. I am 85 year old retired person from Railway and will be planning to file return before 31st Aug.2018. Please reply me as early as possible.
Regards
Chunilal G. Shah

• Hi,

1) First you need to calculate the capital gains amount. For that you need the indexed cost based on the fair market value in 2001 and then use the indexation chart to know the indexed cost. Then the capital gains = sale – indexed cost.

2) The capital gains tax can be saved by investing in residential property (provided you donot hold more than 1 residnetial property at the time of investment)

https://wealth18.com/how-to-save-capital-gains-tax-on-sale-of-property-in-india/

The rest of the capital gains profit can be invested in the Captital Gains bonds (NHAI / REC)

114. Dear sir, thanks for your valuable information. I have sold my Mumbai property in August 2018. I would like to know the following:
1. Is their different CII for every city ?
2. Within how many days I have to keep the Capital gain tax amount in account and which account. Does this will fetch interest?
3. Can I park the capital gain amount in other instruments and withdraw while depositing in Capital gain tax account.
4. Is this true that, once we withdraw the amount from Capital gain account, we can’t remit the amount again back in to account?

Appreciate your detailed reply and guidance to refer in depth information from any site or book.

115. Sir,
IN FY-2015-16 I old a property inherited from my father which was bought in 1974. I would like to know that what values shall be used to calctae the long term capital gain.

• Capital Gain = Sale price – Indexed cost
Indexed cost = cost * Index in Sale year / Index in Purchase year (or 2001)

As you bought property before 2001, you need to get the Fair market value of the property in 2001 to calculate the indexed cost.

116. Dear Sir,
Many thanks for your informative writing on ‘Capital Gain’. I request you to please read my following statements and give your valuable opinion.
I completed construction of my house in 1991. In 2010, I decided to sell my house and took help of a Govt. approved valuer who had estimated “Fair Market Value” of my property. But because of some problem, I cancelled selling the house.
Now this time (OCT 2018) I got a buyer and want to sell it for sure. While calculating Indexed cost of acquisition can I calculate like this:
Fair Market Value of 2010 X CII of 2017-18 / CII of 2010-11.
Or, I’ll have to take help of a valuer once again?

• Hi Bhaskar, As the property was acquired before 2001, You need to get the fair market value of the property as at 1/4/2001 and then apply indexation.

117. sir,
Is CII is for all over india same ? or diffrent for each city?
if its diffrent where can i get CII chart for diffrent city ?

118. Sir,
Request to Kindly brief on capital gains matter as under:

Property purchased in 1995 – 1000 sq yard with ground floor 2512 sft.
for Rs.10 lakhs as per sale deed. plus reg. charges Rs.85000/-
First floor constructed year 2000 2512 sft Rs. 20 lakhs

Property sold July 2018 for Rs 3.3 CR, New property purchased for Rs.
90 lakhs regn before March 2019.(Additional Chargers for interior &
electrical etc )

We have a valuation report dtd 25-02-2012 as followes
For constructed area less dep Rs.25.79 Lac
Land 1000 Sq Yards @ Rs.5500 = Rs.55Lacs
Total Rs.80.79 Lacs.

Please give basis for calculating capital gains and balance amount to
be invested in capital gains exemption bonds.

119. Sir,

My Father purchased a plot and built a house in our village. He died couple of years back and right now we are selling the house. How to calculate the capital gain ?

• Hi Jaya, You need some basic information first – when was the plot purchased, when house was built, what was the cost etc.

120. Dear Sir,

I purchase land in August 2010 @4.50Lacs (Regsitered agreement value Including stamp duty) & want to sell that land now at 15 Lacs.

Which index year do i need to consider for calculating gain is it 2009 ~ 2010 or 2010~2011?

Can I invest this gain in my existing home loan (I have two home loans against two property) to save on capital gain tax.
If not can I buy new property with this amount to save on capital gain tax

• index start year – 2010-2011

You will not be able to claim the benefit by buying a new property (in addition to 2 other loans) as you will not be able to meet on the condition:

– to claim the tax beenfit, You should not own more than one house prior to the investment.

121. Cost price of flat in 2012 is Rs 43.50 Lacs (including brokerage of Rs 40000 paid in cash ) plus cost of improvement in Jan 2014 is Rs 2.60 Lakhs
Flat is sold in Dec 2018 for Rs 58 Lacs but registered @Rs Rs 64.94 Lacs (circle rate ) and Rs 50000 is paid as brokerage by cheque .
What will be indexation cost of flat and indexation cast of improvement and what will be capital gain amount on sale of flat after taking into account indexation cost and brokerage paid .What proof of cost of improvement can be shown if different work is got done by making cash payments .

In terms of proof, you should have all the receipts in case it comes to scrutiny. Any cash paid for large amounts should be properly backed by a stamped receipt signed by the receiver.

122. Cost of flat in Jan 2012 Rs 43.54 Lacs .Cost of improvement in Jan 2014 Rs 2.60 Lacs .
Sold in Dec 2018 for Rs 58 L .However sale deed is on Rs 64.94 Lacs (Circle rate ) brokerage paid Rs 50000 .What is LTCG amount after taking indexation cost .

• Indexed cost will be = (43.54X 280/184) + (2.6X280/220) = Rs 69.57 lakhs

Capital Gain = Rs 64.54 – 69.57 = LOSS of Rs 5.02 lakhs

123. Date of Purchase Property : June 2012
Purchase Price Rs.1900000.00
Date of Sale : 31.01.2019
Sale Price Rs. 3500000

Can you please let me know the capital gain tax liability.

124. I purchased a plot for Rs.50000 in Feb.1990 and constructed a house in April 1993 with a cost of Rs.4.25 lacks. .The same house was sold for Rs.46 lacks in Jan.2019.Meanwhile i paid from my account for a house purchased in my son’s name. Out of Rs.38 lacks paid to the new house,Rs.20 lacks was paid after the sale of old house.Can i take this payment as my investment in a new house and what would be the capital gain tax after making Fair market value,CII and improvement cost.
Thanking you

• Hi,
1) to calculate the capital gain on old house:
As the indexation base year is now changed to 2001, you need to get the fair market value as in 2001. (see my post above on how to get this)
Then apply the indexation rate to get the indexed cost.
Capital Gain = Sale value – Indexed cost.

2) As the 2nd property is not in your name, you cannot claim the benefit of investment for capital gain tax deduction.

125. Dear sir,
We plan to sale our house in srirangapatana house is around 70year old now the selling price is 30 lack,how to calculate cost inflation index.

• As the indexation base year is now changed to 2001, you need to get the fair market value as in 2001. (see my post above)
Then apply the indexation rate to get the indexed cost.
Capital Gain = Sale value – Indexed cost.

You can get more details in my post above.

126. Hello sir, we recently sold an apartment on Feb 14 2019, we paid advance in 2012 and uds was registered in our name and builders agreement was entered in the same time. . They handed over the apartment in 2014. What do we consider as base year?
Second question- can we add registration of uds sale cost, registration charges and builders agreement amount for purchase price calculation?

• Hi Raghav, The capital gain calculation for the under-construction properties is bit tricky and there is no consistent view. Some expert treat the agreement date as the purchase date, while others the possession date. In most cases, the possession date should be treated as the purchase year. Because before that you just had “right” to own the house and not the “actual” house.

You can add all the necessary charges that was incurred for getting the property.

127. My grandmother inherited a plot of land from her parents before the year 1981. She died also before 1981 intestate. Now in 2017 this land was transferred from her name to the names of her heirs – altogether twenty of us. In the next year 2018 we sold it for Rs.3,50,00,000/- out of which I received Rs.600,000/- as my share. Is this coming under short term or long term capital gains? How do I arrive at the cost of land?

• When the property is gifted / inherited, the original purchase date is considered for any indexation or capital gain (short / long). So I believe you will have long term capital gain.

As the indexation base year is now changed to 2001, you need to get the fair market value as in 2001.
Then apply the indexation rate to get the indexed cost.
Capital Gain = Sale value – Indexed cost.

You can get more details in my post above.

128. Hello Sir,
I have a flat in Lokhandwala , Andheri which I purchased in 1982 for Rs 85000.
I propose to sell for Rs 1.25 crores in April 2019.
Could you kindly advise what will be the capital gain ?
Thanks

• Hi, As the indexation base year is now changed to 2001, you need to get the fair market value as in 2001.
Then apply the indexation rate to get the indexed cost.
Capital Gain = Sale value – Indexed cost.

You can get more details in my post above.

129. Hi

I bought a house in Pune in 2009 for Rs 36Lakhs plus around Rs 4lakhs as govt and other charges charges. What would be the Purchase value for indexation 36L or 40L. Please suggest

130. We bought a LIG DDA flat in 1986 on POA. We further paid monthly 535.5 for 15 yrs. We paid penalty also on delay etc. Further we constructed one extra room in the house and extended balcony in 2002 appx 2,00,000 but we have not retained any paper for that. now its in free hold.

Will the purchase price be what we paid or there is some other rule?

If i sell today 2019 how to caclulate the tax.

Kindly guide.

• You need to get the fair market value of the property as in 2001 and then apply indexation. Please consult your local CA / lawyer.

131. An excellent informative article. Gives a fair idea about Indexation. In my case the property was bought by my grand father in 1968 & is now will sell. How do I calculate Capitol gain tax

• Hi Tapan, You need to get the fair market value of the property in 2001 and then apply indexation. Then calculate the capital gains tax. In my post above, I have also explained how you can get the Fair Market value of the property in 2001.

For the renovation in 2014, you can calculate the indexation from that year.

132. Dear Vivek/ Wealth18,

My mom owns house for which land was purchased in 1987 for Rs. 75k (receipt available), construction cost was approx Rs 2,25,000 with completion in 1990, however, no receipts available for construction/ improvement costs. If she now sells it now for 1.2 Cr. How do I prove the construction cost as receipts are not available. Is there any law for presumption or a way out for historical valuation. Thanks !

• Hu Anuj, You will get the market value of the property in 2001. You can use services from any registered valuer. In such cases, you donot need to have the previous receipts as the base value will be valued by the valuer. Based on 2001 value, you need to use the index chart to calculated the indexed cost and then the capital gain.

133. Thanks for providing such excellent information on Capital Gain on the sale of the property,
I’d appreciate if you can give a real example of Capital Gain for the property bought in 1999 and sold in 2018.
Based on the table, the gain is 280 from 2001 to 2018. However, how do we get the market value of the same property in 2001?
Or to be very specific, say, the property purchase in Nov 1999 at INR 5,50,000 and sold at INR 45,40,000. What is the capital gain for this?
Another one – the property purchase in Nov 1999 at INR 8,75000 and sold at INR 80,00,000. What is the capital gain for this?
Thanks – and looking forward to the response on this with appropriate calculations.
(1999 – Index was 351 based on 1981. However, I do not find any connection between the two tables. One goes from 1981 to 2001 and another from 2001 till date.)

• Hi Praful,

1) You will need to get the market value of the property in 2001 and then use the new capital gain index table.

2) there are various options given in the post to get the market value as in 2001. The unofficial otpion is to use the old index table to approx calculate the price in 2001.

e.g. purchase price in 1999 X index in 2001 / index in 1999 == 550000 X 406/351 = 6.36 lakhs (use this as a base value for 2001 and then calculate the new indexed prices as per new indexation chart. Hope this is helpful.

134. Good Day Sir,

Very enlighting write up on Capital Gains. Thanks. I have following querries:
1. Can capital gains be added to my income and investment in 80 C be offset against this amount. I am not working and not having pension either. My bank interests are about Rs. !,00,000/- and no other income.. i have sold a flat this year and capital gains are about Rs. 1,00,000/-. If this is added to my income I still do not have to pay tax. Kindly advise.

Thanks

• If your income (other than caqpital gain) is below the tax slab, then your taxable capital gain amount will be reduced. So if you other income is just 1 lakh and capital gain amount is 1 lakh, then you donot have to pay any tax.

135. Hi Sir, I purchased land @ Rs 32 Lacs & registered in the year 2005. Subsequently spent Rs 45 Lacs in 2006 & Rs 17 Lacs in 2007 towards construction & completed construction in March 2007. I plan to sell the house now. How do I index my initial investment for LTCG calculation? Kindly guide.

136. Hello Vivek,
I bought an apartment in Mar 2004 taking HL for 7.5L and have planned to sell it this year.
My query is “what proof do we need to produce to show the actual purchase of the apartment”? and what all are covered in the cost of improvement (relayed tiles, added grills etc).
Thanks,

• Hi Sudhakaran, You can produce any registration document, completion or possession document.
Any major cost that is adding value can be considered as Improvement, but not repairs.

137. Hi, Need your help please. Bought a flat in 37 lakhs which was registered in Oct 2008 and planning to sell now Sept 2019 for 61.5 lakhs. Could you help me in calculation please of the capital gain? Thanks!

138. What if the property sold value is less than the expected CII value? Means no capital gain.

Ex:
1. Bought a flat on 2009 for 45L, CII was 148
2. Sold the flat on 2019 for 60L, CII was 280

In the above case there is no capital gain. What should I do?

• In that case it will be capital loss that can be brought forward to next years to settle against future capital gains.

139. I purchase the residential house at rs 550000/- on 16.06.1998, and sell the house at rs 3000000/- in July-2019 what will be capital gain tax. Also I had renovate the same house in year 2014 in invested rs 11,00,000/-

• Hi Nitin, You need to get the fair market value of the property in 2001 and then apply indexation. Then calculate the capital gains tax. In my post above, I have also explained how you can get the Fair Market value of the property in 2001.

For the renovation in 2014, you can calculate the indexation from that year.

140. I had purchased a plot in jammu for Rs 15lacs in Feb 2012 and sold same for Rs 28 lacs on 30-th July 2019.What would be my capital Gain and LTCG for income tax

141. Dear Sir, Earlier last month I had requested for one clarification. But I do not know why it was deleted & no reply came from your end. I am repeating the request so that it will be helpful in calculating my Long Term Capital Gains from sale of house. I bought land in year 2005 for Rs 32 Lacs & then spent approx. 32 Lacs & Rs 30 Lacs in 2006 & 2007 respectively for construction of house. If I sell it now, I wish to know how my original investment will be indexed for calculating the LTCG.

• Hi Venkat, You need to index these separately as per different years and then total it to arrive at Total Indexed cost.

142. I am member of a Coop. Housing Society. The society had bought a piece of agricultural land in the name of the society with the intention of constructing bungalows, but for reasons we could not build our bungalows. Entire land is in the name of the society. Land is now in the Pune Municipal Corporation area. It was never subdivided into plots nor any plots were allotted to anybody. Now, we intend to sale this plot. When the society sells the plot, whether society will have to pay LTCGT? Is there any exemption such as sec 54 available to the society?

• Hi Virendra,

Agricultural land in rural area is not subject to capital gains tax. As per Section 2(14) of the Income-Tax Act, the term capital asset does not include agriculture land in India

However, the following agricultural lands are considered as capital asset:
(a) Agriculture land situated within the jurisdiction of municipality or cantonment board and having population of 10,000 or more, or, (b) In any area within the distance, measured aerially:

(i) being more than two kilometres, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of more than 10,000 but not exceeding one lakh; or (ii) being more than six kilometres, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of more than one lakh but not exceeding 10 lakh; or (iii) being more than eight kilometres, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of more than 10 lakhs.

If the agricultural land satisfies the criteria of being capital asset, then gains arising on the sale of such land will be taxable as Capital Gain. Benefit of Section 54B is only available to individual or his parent, or a HUF.