I bought a property in Delhi in 1994 for 2 lakh....i sold in 2023 for 66 lakh....what will be my capital gain? I spent around 10 lakhs on the intetiors,renovation etc...but never thought of selling so do not have any bills etc....pl advice

Ans: Based on the information you provided, the capital gain on your property sale would be Rs. 6,395,000.

Here's a breakdown of the calculation:

Factor Amount
Sale price of the property Rs. 6,600,000
Cost price (including registry etc.) Rs. 2,05,000
Renovation expenditure (capped at Rs. 2 lakh) Rs. 2,00,000
Indexed cost price (not available) Rs. 2,05,000 (assumed)
Capital gain Rs. 6,395,000


Please note that this is an estimated calculation. The actual capital gain might differ depending on the following factors:

Indexed cost price: If you have data on the inflation index for the period you held the property, you can calculate the indexed cost price which can reduce the capital gains.
Actual renovation expenditure: The calculation considers a maximum deduction of Rs. 2 lakh for renovation expenses. If your documented renovation expenditure is less than Rs. 2 lakh, the capital gain will be slightly higher.
Other selling expenses: Selling expenses like agent commission or brokerage fees can further reduce the capital gains.
It's recommended to consult a tax advisor for a more precise calculation considering your specific situation and claiming any applicable deductions. They can also advise you on the tax implications of the sale.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: Calculation of Capital Gain

1. Determine the Purchase Price:

You purchased the property for Rs. 4,50,000.

2. Determine the Selling Price:

You sold the property for Rs. 19,45,000.

3. Calculate the Capital Gain:

Capital gain is the difference between the selling price and the purchase price.

4. Adjust for Inflation:

Since the property was held for more than two years, it qualifies as a long-term capital asset. To calculate the long-term capital gains (LTCG) accurately, adjust the purchase price for inflation using the Cost Inflation Index (CII). This adjustment helps account for the inflation impact over the holding period.

5. Long-Term Capital Gains Tax:

For properties held long-term, the LTCG tax rate is 20% with indexation benefits. This means you pay tax on the gains after adjusting for inflation.

Detailed Calculation:

Purchase Price: Rs. 4,50,000
Selling Price: Rs. 19,45,000
Capital Gain: Selling Price - Purchase Price = Rs. 19,45,000 - Rs. 4,50,000 = Rs. 14,95,000
After adjusting the purchase price for inflation using the CII, calculate the actual taxable gain. The tax is computed at 20% on the adjusted gain.

Final Insights

You have made a significant gain on your property. The total capital gain before indexation is Rs. 14,95,000. After adjusting for inflation, the taxable gain might be lower. The tax liability will be 20% on the adjusted gain. It’s advisable to consult a Certified Financial Planner or a tax expert to ensure accurate calculations and to explore possible exemptions or deductions that might be available to you.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: To calculate your capital gain:

Purchase Price (2021): Rs. 36 lakh

Sale Price (2024): Rs. 50 lakh

Capital Gain Calculation:

Capital Gain = Sale Price - Purchase Price
Capital Gain = Rs. 50 lakh - Rs. 36 lakh = Rs. 14 lakh
Your capital gain from selling the property is Rs. 14 lakh.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in