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Should I pay less tax on my Mira Road flat sale?

Mihir

Mihir Tanna  |961 Answers  |Ask -

Tax Expert - Answered on Sep 10, 2024

Mihir Ashok Tanna, who works with a well-known chartered accountancy firm in Mumbai, has more than 15 years of experience in direct taxation.
He handles various kinds of matters related to direct tax such as PAN/ TAN application; compliance including ITR, TDS return filing; issuance/ filing of statutory forms like Form 15CB, Form 61A, etc; application u/s 10(46); application for condonation of delay; application for lower/ nil TDS certificate; transfer pricing and study report; advisory/ opinion on direct tax matters; handling various income-tax notices; compounding application on show cause for TDS default; verification of books for TDS/ TCS/ equalisation levy compliance; application for pending income-tax demand and refund; charitable trust taxation and compliance; income-tax scrutiny and CIT(A) for all types of taxpayers including individuals, firms, LLPs, corporates, trusts, non-resident individuals and companies.
He regularly represents clients before the income tax authorities including the commissioner of income tax (appeal).... more
Asked by Anonymous - Jul 31, 2024Hindi
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Hi Mihir, I have a flat in Mira road which I have purchased in 2010-11 at 1600000 now I would like to sell it but getting lesser price then municipal valuation which is 4600000. So can I make lesser than municipal valuation and pay lesser tax. I am getting offer for sell 43 lac or 44 lac

Ans: In such case stamp duty value will be considered as sale consideration, Subject to certain specified conditions.
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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Mihir

Mihir Tanna  |961 Answers  |Ask -

Tax Expert - Answered on Sep 29, 2022

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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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Ramalingam

Ramalingam Kalirajan  |6922 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 01, 2024

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Sir, I am intending to sell our FLAT at Hyderabad, which was purchased in the year 2014 for Rs.24,00,000/-, now the present market rate is Rs. 65 lakhs (approximately). If I sell the Flat for 65 lakhs, how much tax(LTCG) I have to pay or is there any exemption under IT Act as I am not interested in purchase of another house, instead, I am proposing to purchase Agricultural land with the sale proceeds of my Flat. Anxiously awaiting for your valuable advice in this regard, Thanking You Sir, Yours faithfully, G.Sriramulu, Retired employee, HYDERABAD.
Ans: Based on the information you've provided, you'll likely incur Long-Term Capital Gains (LTCG) tax if you sell your flat in Hyderabad. Here's a breakdown:

Scenario:

Flat purchased in 2014 for Rs. 24,00,000
Expected sale value in 2024: Rs. 65,00,000
Holding period: Over 24 months (Long-Term Capital Gains)
No reinvestment in another residential property
Tax Calculation:

Capital Gain: Rs. 65,00,000 (Sale value) - Rs. 24,00,000 (Purchase value) = Rs. 41,00,000
Indexation benefit: However, you'll likely benefit from indexation, which adjusts the purchase price for inflation, reducing your taxable gains. You can calculate the indexed cost using the Cost Inflation Index (CII) provided by the Income Tax Department for the relevant years.

LTCG Tax Rate: After considering indexation, the remaining capital gain will be taxed at 20%.

Important Note: I cannot provide the exact tax amount due to the complexity of indexation calculations.

Exemption Not Applicable:

Unfortunately, purchasing agricultural land doesn't qualify for exemption under Section 54 of the Income Tax Act, which offers exemption on LTCG from the sale of residential property if the gains are reinvested in a new residential property.

Recommendations:

Consult a Chartered Accountant (CA): A CA can help you calculate the exact LTCG tax liability after considering indexation and other relevant factors. They can also advise on any potential tax-saving strategies that might be applicable in your case.
Explore LTCG Investment Options: While you're not interested in buying another house, consider exploring other options to potentially save on LTCG tax. These include:
Capital Gains Bonds: Investing in specific long-term capital gains bonds issued by the National Housing Bank (NHB) or other government bodies can help you save tax under Section 54EC.
New Residential Property: If you're open to the idea of a new property in the future, remember the exemption under Section 54 applies.
Remember: This is just general information, and it's crucial to consult a professional for personalized tax advice based on your specific situation

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Radheshyam

Radheshyam Zanwar  |1020 Answers  |Ask -

MHT-CET, IIT-JEE, NEET-UG Expert - Answered on Nov 04, 2024

Asked by Anonymous - Nov 03, 2024Hindi
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Hello Sir, I am an MBA graduate with a specialization in Marketing and HR. However, I feel that my communication skills are not up to the mark, which has made it challenging for me to secure a well-paying job. I am now considering a career switch to either the IT or Banking sector, as I have a solid foundation in digital marketing. I'm still uncertain about which path to choose. Could you suggest which industry might be better suited for me, along with the recommended courses and the process to get started? Thank you.
Ans: Hello
You completed an MBA with a specialization in Marketing and HR. You are lagging in communication skills. It seems that you have not tried to improve your communication skills hence you might have failed to get a good job in Marketing, as the marketing field is dependent on communication skills. You put two options IT and Banking Sector, Even though you have a solid foundation in Digital Marketing, you may fail in the IT sector. it would be better for you to try the Banking sector, as it has wide applications that IT. Bank is the need of each person, hence have more potential for the person who has less communication skills. Almost all the reputed banks do their advertisements on all types of media platforms. Hence a marketing person working for the banking sector has to explain less as compared to IT marketing. While working in the Banking sector, side by side you can do Digital Marketing also on a part-time basis. There is no need to do more courses as you have already done specialized courses in Marketing and HR. It would be better to keep a close watch on reputed banks' websites for the latest updates on employment.

If satisfied, please like and follow me.
If dissatisfied with the reply, please ask again without hesitation.
Thanks.

Radheshyam

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Radheshyam

Radheshyam Zanwar  |1020 Answers  |Ask -

MHT-CET, IIT-JEE, NEET-UG Expert - Answered on Nov 04, 2024

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Hi Sir, I am tensed as JEE Main Examination is approaching and i am scared that i would only be able to score 100/300 at best. Please suggest me some good regional colleges. I am female single girl child in Delhi. Engineering was never my first priority yet I chose it because it seemed a safe option. I would also try and give CUET. One more concern is that my 5th subject in class 12 is GST or Geospatial Technology. Is there any scope for this subject through which I can enter a decent college. I dont want to spend my parents money..Please help. I am distressed
Ans: Hello Shaamhavi
First I would like to say that without any fear in mind and a predetermined score, you appear for JEE 2025 in 1st session. To improve your score/performance, you have 2nd attempt also.
You said, engineering was never your 1st priority. Then, why not have discussed this fact with your parents or parents have forced you to go for engineering? It is not clear from your question. How you can say, it is a safe option is also not clear.
If you are scared about JEE preparation, then it would be better to try CUET. GST i.e. Geospatial Technology is a good subject and there is scope in this field.
Now, I would like to suggest you: (1) Focus more on JEE preparation or CUET (2) Try to excel in GST subject (3) Try to score more and more in the respective examinations on a priority basis, (4) No need to take the stress about parents money as the expenses are already done on your classes + college tuition fees, etc. (5) Leave up all other aspects of Regional College availability, descent college in GST field etc. (6) For all your problems, only one answer: SCORE HIGH IN THE EXAMIANTIONS IN WHICH YOU ARE APPEARING.

If satisfied, please like and follow me.
If dissatisfied with the reply, please ask again without hesitation.
Thanks.

Radheshyam

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DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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