Home > Money > Question
Need Expert Advice?Our Gurus Can Help

Will I lose Indexation Benefit on my sold plot?

Anil

Anil Rego  |384 Answers  |Ask -

Financial Planner - Answered on Jul 24, 2024

Anil Rego is the founder of Right Horizons, a financial and wealth management firm. He has 20 years of experience in the field of personal finance.
He’s an expert in income tax and wealth management.
He has completed his CFA/MBA from the ICFAI Business School.... more
Kolli Question by Kolli on Jul 24, 2024Hindi
Listen
Money

Mr. Anil I purchased a House Plot 60X40 ft during 2001. Now I am trying to sell the plot. Pl. clarify whether I will not get any Indexation Benefit on Acquisition Cost / Buy Cost as per this new Budget. I am Retired Pvt Employee and this Plot is with me for last 23 Yrs. Pl. advise how to reduce LTCG Tax burden. K. Ravindranath , Hyderabad

Ans: Dear Kolli,
The Finance Ministry has clarified that house property bought before 2001 is eligible for indexation benefit, not on or after.
Best Regards,
Anil Rego,
Founder & CEO,
Right Horizons
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.
Money

You may like to see similar questions and answers below

Ramalingam

Ramalingam Kalirajan  |7966 Answers  |Ask -

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

Listen
Money
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

..Read more

Latest Questions
Radheshyam

Radheshyam Zanwar  |1184 Answers  |Ask -

MHT-CET, IIT-JEE, NEET-UG Expert - Answered on Feb 14, 2025

Listen
Career
Hello sir, I am stuck in confusion about my career previously i was working as HR due to personal reason had to leave the job and there was gap of 4 years and again after few years had to do new start up from zero and working to Administration department for almost 4 years i am planning of switching job as i dont find any scope and growth to the work i am doing and underpaid here.Not understanding again i should switch back to HR job or continue into adminstration job and also please advice where will i get to learn and upgrade my skill and have growth in my career.Please help sir
Ans: Hello Tanmay.
Nothing is mentioned by you about your qualifications or company profile. Only it is clear that you left the HR job, remained jobless for 4 years, and joined to new startup, but not satisfied there also, and are again interested in joining the previous HR job.
Dear, it would be better for you to join the HR job again. Working in an administration job requires specialized skills which I think you might be lagging. According to your qualifications, it would be better to join some online/offline courses which are helpful to your present job conditions and also useful if you decide to change the job in the future. As I do not know your educational qualifications, it is difficult for me to suggest you properly. For proper counseling/suggestion, please tell us your educational qualification, extracurricular activities, and computer knowledge if any.

If satisfied, pl like and follow.
If unsatisfied, pl ask again without any hesitation.
Thanks
Radheshyam

...Read more

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.

Close  

You haven't logged in yet. To ask a question, Please Log in below
Login

A verification OTP will be sent to this
Mobile Number / Email

Enter OTP
A 6 digit code has been sent to

Resend OTP in120seconds

Dear User, You have not registered yet. Please register by filling the fields below to get expert answers from our Gurus
Sign up

By signing up, you agree to our
Terms & Conditions and Privacy Policy

Already have an account?

Enter OTP
A 6 digit code has been sent to Mobile

Resend OTP in120seconds

x