Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: articles on VAT and GST in India :: list of goods taxed at 4% :: ACCOUNTING STANDARD :: TAX RATES - GOODS TAXABLE @ 4% :: cpt :: due date for vat payment :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: form 3cd :: TDS :: VAT RATES :: VAT Audit :: Central Excise rule to resale the machines to a new company :: ARTICLES ON INPUT TAX CREDIT IN VAT :: ACCOUNTING STANDARDS :: empanelment
 
 
« General »
 Tax breather for foreign investors: All you need to know
 What the increase in tax collections does not tell us about Indian economy post demonetisation
 India’s crazy retrospective tax on foreign funds will tarnish country’s reputation
 How tax related, PAN grievances can be resolved through E-Nivaran
 Tackling income tax exemptions for equities and agriculture
 Amfi wants tax benefits for retirement plans
 Top five factors which could chart market direction in the coming week
 Tax rate hikes boost shadow economy
 Tax mop-up may decline in new amnesty scheme
 Weeks before Budget, Finance Minister Arun Jaitley lists out benefit of low tax rates
 Second home loan tax benefits

No tax benefit available on short-term capital gains tax
December, 27th 2012

In the absence of complete facts, we have assumed that you have held the residential property for more than 36 months from the date of acquisition and accordingly, the gains shall be termed as long-term capital gains (LTCG). The LTCG could be claimed as exempt from tax by reinvesting the same in a new residential property within the specified time frames (within one year prior to sale date or two years from the sale date or within three years for an under-construction property) as per section 54 of the Income-tax Act, 1961. Alternatively, the LTCG could be invested in specified bonds issued by the National Highways Authority of India or Rural Electrification Corp. Ltd under section 54EC of the Act, within a period of six months from the date of transfer of the property, subject to a cap of Rs.50 lakh per financial year (FY).

The investment in new property or specified bonds has a lock-in period of three years. Accordingly, if the new property is sold or the bonds are converted into cash within a period of three years, the exemption claimed from LTCG in respect of old property shall be revoked. If you take any loan or advance against the security of the said bonds, the same shall be deemed to be converted into cash. We understand that you propose to utilize the entire money for your child’s education. In such a case, if you do not require the entire funds for the child’s education for the next three years, you could consider reinvesting the LTCG in the above assets.

The amount invested in a residential property or specified bonds as per the provisions of the Act shall be claim as exempt from tax and the balance amount, if any, shall be taxable at a flat rate of 20.6% (including education cess). While calculating the LTCG, the cost of acquisition and improvement shall be inflated/adjusted by applying the cost inflation index notified by the tax authorities.

Please note that if the property has been held for less than three months from the date of acquisition, the resulting gains shall be termed as short-term capital gains (STCG). Further, since there is no avenue whereby an exemption from STCG can be availed, the entire STCG shall be taxable as per the applicable tax slab rate.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Enterprise Resource Planning Solutions ERP Solutions Enterprise Resource Planning Software Solutions ERP Software Solutions Supply Chain Management Solutions SCM Solutions Supply Chain Management Software Solutions SCM Software Solutions Enterprise Resource Planning Solutions India ERP Solutions India Enterprise Resource Planning Software Solutions India ERP Software Solutions India Supply Chain Management Solutions India SCM Solutions India Supply Chain Management Software Solutions India SCM Software Solutions India

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions