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Nikunj Saraf  |205 Answers  |Ask -

Mutual Funds Expert - Answered on Feb 16, 2023

Bhavesh Question by Bhavesh on Feb 15, 2023

Question regarding Real Estate. - I purchased a property at a document value of Rs.10.00Lacs. - Subsequently the corporation index rates increased (Doubled) within 6 months of my purchase. - Now if I sell my property at the increased index rates, within 2 years of my purchase, - Will I have to book profit for the difference in index rates of purchase & sale. Please Advise
Ans: Hello Bhavesh, please consult your tax advisor for the same

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Mihir Tanna  |329 Answers  |Ask -

Tax Expert - Answered on Oct 03, 2022

I booked a house from builder in March 2012 with basic price of Rs 30.89 lakh + gst of around 3%. I paid around Rs 12.37 lakh + gst by July 2012 and balance of Rs 18.52 lakh approx + gst by 31.05.2013 in equal monthly installments. In March 2016, I paid EDC of approx Rs 1 lakh, Rs 1.43 lakh as freehold charges, stamp duty of Rs 2.27 lakh and registry charges of Rs 0.20 lakh aggregating Rs 35.79 lakh + gst. Total cost including gst is approx Rs 37.00 lakh. The registry was executed in January 2017. Now, I expect to sell my property in September 2022 at a consideration of Rs 72 lakh. I have the undernoted questions: 1. Shall I get indexation benefit from the date of payments made to the builder or date of registry? 2. Do I need to open capital gains account or can I realise the sale proceeds in my regular savings account and invest the LTCG in the chosen bonds? 3. Do I need to deposit the entire sale proceeds in the notified bonds or only the LTCG after indexation and rest money utilize in whatever way I like without attracting tax?  4. Will GST be included in the cost of acquisition of my property?
Ans: Indexation benefit will be available from the date of payments made to the builder.

If you want to avail tax exemption by investing in bonds, you have to invest amount of taxable capital gain (derived after taking benefit of indexation), in bonds within 6 months of transfer of property.

Accordingly, sale proceeds can be realised in regular saving account and can be kept till the time you invest in specified bonds.



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