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Mihir

Mihir Tanna  |905 Answers  |Ask -

Tax Expert - Answered on Nov 23, 2023

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
Santhosh Question by Santhosh on Nov 22, 2023Hindi
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Sir, I sold my flat @ 90 lakhs which was purchased in 2010 for 28 lakhs. Whether I can add stamp duty and registration fee paid in 2010 to the cost of flat for calculating capital gain? Also I have carried out home improvement works including painting and these are eligible for tax calculation? Please advise

Ans: Yes, Stamp duty and registration fee will form part of cost of acquition. However it is not advisable to consider it as cost, if deduction u/s 80C is taken in the year of purchase.

Further, cost of improvement will allowed for deduction separately while calculating capital gain.
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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I have booked a under construction flat in May 2022 for 2.80 crs inclusive of GST and stamp duty likely possession in December 2023, Flat is in joint name with my wife on 50:50 basis. I have availed joint Bank loan of 2.10 crores which is partially disbursed approx 1.76 crores up to now. balance will be disbursed before possession. I will be selling by old flat in January 2024 which is in my individual name, which I purchased in July 2017 for 92.50 lacs inclusive of stamp duty, approx selling price will be 1.25 crores. This flat is also on loan of 54 lakhs outstanding .What will be the capital gain against this and can this be setoff against the new flat? Difference amount 1.25 crores(sale price) less 54 lakhs (Bank Loan) balance amount of 71 lakhs I might pay against the new bank loan of 2.10 crores which will reduce the loan to 1.39 crores. Please guide how to go to save the Capital gain tax.
Ans: Hi
You may have a long term capital gain of about Rs. 6.70 Lakhs. Suggestions to avoid paying any tax on this gain would be to pay towards the construction of the new house. This would mean that you may need to sell your house before you take possession of the new house in December 2023 and use the sale consideration to pay to the builder to the extent of approx Rs. 6.70 Lakhs to make it eligible as reinvestment in a new under construction property. This cannot be the other way round i.e. you cannot pay full amount to the builder and take possession and thereafter sell the old house.

If you need the house to stay till the possession of the new property then you could try for a rental arrangement with the buyer of your old house.

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Sanjeev

Sanjeev Govila  |458 Answers  |Ask -

Financial Planner - Answered on Jul 28, 2023

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I have some queries regarding tax on sale of my property which I need to show in my Income Tax return in FY-2023-24. I had purchased a flat in Kolkata at a total cost of 8.50 lacs [including registration cost] and registration was done in April, 2004. I had sold the said flat in May,2023 at Rs.31 lacs. My queries are :- 1. Do I need to pay Capital Gain tax on the sale of this flat ? 2. How much tax do I need to pay ? 3. How to show this capital gain income and tax in my Income Tax retirn next year ? Please advise. Regards, Ratan K. Saha
Ans: You need to understand the following things about taxation of your flat:-
1. You have earned a profit (called capital gains in this context) on the sale of your house. So tax is due.
2. However, tax will not simply be 31L – 8.5L. The Govt gives you an advantage of inflation over the years which increases your purchase cost through a process called ‘Indexation’, thus decreasing your tax. Please google and read up on it, or contact a good CA or a financial advisor.
3. You also get credit for registration and stamp duty charges, brokerages paid as also any improvements done in the house of a permanent nature.
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