Purchased a residential plot for 3lakhs in March 2002 and now selling for 20lakhs. What will be impact on IncomeTax(30%bracket), Wealth Tax, Capital Gain Tax?
Dear diamondlady, As u purchased the plot in march 2002 i.e. FY 2001-2002 & now u r selling it after 7 years in FY 2009-2010, ur total holding period is more than 3 years. hence ur gains `ll be considered as Long Term Capital Gains. Now u can claim benefit of indexation on this gain. Here is the tax calc. for u.
A. Original purchase price = 3L
B. Purchase FY = 2001-2002
C. Cost inflation index of 2001-2002 = 426
D. Sell FY = 2009-2010
E. CII of 2009-2010 = 632
F. Indexed purchase price = 3*632/426 = 4.45L
G. Sell price = 20L
H. Indexed LTCG = 20-4.45 = 15.55L
I. Tax on LTCG @ 20.6% = 3.2L
Plz. note ur marginal rate of tax is 30% but here the LTCG `ll be taxed @ 20.6%. To save on paying this LTCG tax amount, u have following options -
1. Invest the gain amount of 15.55L Rs. in Cap. gain saving bonds of NHAI or REC for 3 years.
2. Purchase a house for urself from gain amt. within next 2 years or construct one within next 3 years from the date of sell of ur plot.
| NIFTY 
