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What taxes should I pay on the sale of my property?

T S Khurana |367 Answers |Ask -Follow

Tax Expert - Answered on Feb 18, 2025

A certified management accountant since 1993, T S Khurana is a fellow member of The Institute of Cost Accountants of India. His areas of expertise are income tax, specifically litigation cases, and GST.

Since the last 21 years, he has also been providing expert advice on financial matters, including investments and diversification of funds, and wealth building in the long term to his clients.
He believes that investment in real estate is the safest way for better returns and wealth generation over a period of time.

A former chairman of the Chandigarh Chapter of Institute of Cost Accountants of India, T S Khurana has also served as member of its technical committee.... more

Asked by Anonymous - Feb 18, 2025Hindi

GM..Sir, I don't have any other income source and am been living on old savings which was over. So to survive, I want to sale my property which I had purchased @ 49 Lacs in Feb 2023. Today's, value is around 90L. In the meantime, I took gold loan of @9.9 L , and personal loan of @ 14 L. ehat is the tax payable by me and how much of these loans can be adjusted against income. How capital gain tax and income tax payable? Thanks in advance for your valuable guidance.

Ans: 01. Your loans, either Gold Loan or Personal Loan, shall have no impact on your income tax liability.
02. When you sell your property, you would be liable to pay LTCG (if you sell property after February-2025).
03. You should calculate LTCG without Indexation & pay 12.50%. This LTCG & tax liability can further be reduced by around Rs.3,00,000.00, since you have got no other income.
Most welcome for any further clarifications. Thanks.

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Mihir Tanna |1018 Answers |Ask -Follow

Tax Expert - Answered on Sep 29, 2022

Question by Rabin - Sep 29, 2022Hindi

Dear Mr Mihir, I would like to know the following points: I bought a flat in Thane - 400603 @ rs.one lakh in Dec.'1983 & would like to sell now this year 2022 @ rs.64 lakhs. Pl. let me know the amount of Property Gain Tax (Long Term) which I have to pay now considering 'Ready Reckoner Rate' at Thane - 400603 area or how to calculate the same to get taxable amount? Also can I (as Sr. Ctzn.) get a tax exemption as I already bought (in joint ownership where my wife is 1st owner) another flat @ rs.75 lakh in Thane in Nov '2020? May I invest taxable amount (if any) in Govt. Bonds like NHAI / REC / PFC to get tax exemption & what interest I will get for how many yrs. or else if it will be better to invest my selling amount in good Flexi Cap Mutual Funds for 5 years after paying entire taxable amount to recover the same? Will appreciate your prompt feedback in detail.

Ans: Capital gain on sale consideration will be reduced by Indexed cost of acquisition and allowable expenses incurred on transfer. You have to calculate indexed cost of acquisition by applying Cost Inflation Index as per prescribed formula on cost of acquisition.

For cost of acquisition, you may take actual cost or fair market value of the asset, as on 01.04.2001.

In case of land and building, fair market value on 01.04.2001 cannot exceed stamp duty value as on 01.04.2001.

Exemption is available if amount of capital gain is invested by purchasing a new residential house within one year before or within 2 years after the date of transfer of the residential house.

As you have already got possession of new property in November 2020, you will not be eligible for exemption.

Decision of investment in specified bonds or acquiring tax mutual funds can be taken after considering several factors like risk appetite, amount of tax liability on capital gain, availability of surplus fund etc.

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