I HAD PURCHASED THE FLAT ON FEBRUARY 2002 AT A COST OF RS. 350000 AND SOLD IT ON AUGUST 2023 AT A PRICE OF RS. 7000000
PL. CALCULATE THE INDEXATION COST AND TAX.
Ans: To calculate the indexed cost and capital gains tax on the sale of your flat, we will use the Cost Inflation Index (CII) provided by the Income Tax Department of India.
Here's the step-by-step process:
Step 1: Determine the Purchase Cost and Sale Price
Purchase Cost: Rs. 3,50,000 (February 2002)
Sale Price: Rs. 70,00,000 (August 2023)
Step 2: Identify the Relevant Cost Inflation Index (CII)
CII for FY 2001-02 (the base year for purchase): 100 (as per the updated base year of 2001-02)
CII for FY 2023-24 (the year of sale): 348
Step 3: Calculate the Indexed Cost of Acquisition
Indexed Cost of Acquisition: Rs. 12,18,000
Long-Term Capital Gain: Rs. 57,82,000
Tax on LTCG: Rs. 11,56,400
Therefore, you will need to pay Rs. 11,56,400 as long-term capital gains tax on the sale of your flat.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in