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Selling a 4.8 Cr Property and Want to Save on LTCG? What are my Options?

T S Khurana |367 Answers |Ask -Follow

Tax Expert - Answered on Feb 19, 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

Question by Priya on Feb 17, 2025Hindi

Money

I would be selling a property at around 4.80 cr. How can I save LTCG? if I were to use indexation I need to get guide line value of property in April 2001 and pay 20 % of reduced value? How can I save OVERALL LTCG?

Ans: 01. Index value is 100 as on 01.04.2001.
02. You may calculate tax under both options (with Indexation - 20.00% or without Indexation 12.50%) & decide the option, beneficial to you.
03. You may plan your Tax payment, by investing LTCG, either in any Residential Property or in Capital Gain Bonds.
Most welcome for any further clarifications. Thanks.

Asked on - Feb 19, 2025 | Answered on Feb 20, 2025

Dear Sir, Would you be able to help in filing my LTCG? INDEXATION as on April 2001 would be 100? What would that mean Sir ?

Ans: 01. Indexation as on 01.04.2001 (F/Y 2001-02) is 100 & 363 for (F/Y 2024-25) means, the cost of Property shall be increased by multiplying with the factor 363/100. This will give you indexed value of your property for calculation of LTCG during the year. Supposing cost of your property was Rs.1.00 lakh as on 01.04.2001, it will now be treated as Rs.3,63 lakhs for LTCG calculation.
02. Sure. We shall support you filling your ITR. Whenever you face any problem, you are most welcome to write/mail us.
Most welcome for any further clarifications. Thanks.

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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Please advise me on LTCG for the house property purchased by my father in 1975 for Rs.44,616/ area is 676 sq ft or 62.79 sq.mtr. I have cold the property this year August 2024 for the consideration of Rs.1.20 cr. How do I compute LTCG? How to calculate fair market value? I wish to avail indexation benefit and also reinvert in house property. Thanks Gautam H

Ans: You will need to reach out to property valuer and arrive at a value as on 01 st April 2001. The amount thereafter can be indexed to current levels by applying inflation index and accordingly the same can be computed.

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Hi Sir, I have purchased a Land in 1997 @ 63000 Rs and sold it @ 45 L at Pune SUS area. How much Indexation is expected please as part of LTCG

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Asked by Anonymous - Oct 22, 2024Hindi

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I am 78 yrs old . I own a land with my 3 brothers who aren't alive any more. They are succeeded by their children. The property is supposed to get sold at 3 crores. So I would get 75 lakhs approx. I have two sons who are working in different companies. Can you please suggest ways to save tax on the LTCG ? I am open to include my sons and my wife in the transaction if that allows to save tax. I don't want to invest in property anymore.

Ans: 01. You are liable to LTCG on your share of sold property.
02. Involving your sons & wife won't help from i.tax point of view.
03. If you don't want to invest in property anymore, you may purchase Capital Gain Bonds u/s 54(EC) from REC or NHAI etc., up to a maximum limit of Rs.50.00 lakhs.
Most welcome for any further clarifications. Thanks.

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