TDS Deduction When Selling Jointly Owned Flat

Ans: The TDS (Tax Deducted at Source) of 1% on the sale of property exceeding Rs 50 lakhs is applicable on the full sale consideration. In your case, since the total sale consideration was Rs 5,973,000, the TDS of Rs 59,730 was deducted as per the guidelines. Based on the information you've provided, you might be liable for Capital Gains Tax. Capital Gains Tax is calculated based on the difference between the selling price and the indexed purchase price. The indexed purchase price adjusts the original purchase price for inflation over the holding period.
The tax on long-term capital gains is usually 20% (plus applicable surcharge and cess) after considering any exemptions or deductions available under Section 54 or Section 54F if you are not investing in another property or capital gains bonds.

To close the transaction and fulfill your tax obligations, you should consider the following steps:

a. Calculate Capital Gains: As explained above, calculate the capital gains based on the indexed purchase price and selling price.

b. Pay Capital Gains Tax: If you decide not to invest in another property or capital gains bonds, you will need to pay the applicable capital gains tax. You can do this by filling out the appropriate sections in your income tax return and paying the tax amount.

c. File Income Tax Return: Ensure that you accurately report the capital gains in your income tax return for the assessment year.

d. Keep Documentation: Maintain all relevant documents related to the property sale, purchase, and tax calculations for future reference

Ans: To calculate the capital gains tax for the ITR year 2023-24, we need to determine the capital gains made from the sale of the shop.

Calculation of Capital Gain:
Sale Proceeds - 60,00,000
Less Indexed Cost of Acquisition - 12,60,952 (= 4,00,000 / 331 X 105)
Capital Gain = 47,39,048

Capital gains tax = Capital gain X Tax rate
=47,39,048*20%
=Rs 9,47,809

Your wife is required to pay the tax of around 9.47 Lakhs on the gain of 47.39 Lakhs.

Disclaimer- kindly contact a CA for exact figure and calculation as the above has been calculated on relevant information provided, the above values may change subject to other facts.

Ans: 01. Under present provisions of Income Tax Act, you may opt any of the options (in case of Long Term Capital Gains), as under :
02. (01). Tax Rate 12.50% without indexation or
03. (02). Tax Rate of 20% with Indexation (Indexation from 01.04.2001).
04. You may take a Certificate from an Architect of the value of Flats, as on 01.04.2001 & adopt this as Cost of Flats for calculation of LTCGs.
05. You may calculate your tax liability under both options & may opt for the tax regime, where tax liability is minimum.
Most welcome for any further clarifications. Thanks.