Table of Contents
- 1 How do I calculate the acquisition cost of a property?
- 2 How is indexed cost of property acquisition calculated?
- 3 Can stamp duty be included in cost of acquisition?
- 4 How do you calculate cost of acquisition without indexation?
- 5 What all can be included in cost of acquisition?
- 6 What if cost of acquisition is not available?
- 7 What is the capital gain tax on the sale of property?
- 8 What is the tax liability of the sold-out ancestral property?
How do I calculate the acquisition cost of a property?
You can find the CII values on www.incometaxindia.gov.in. In the example, CII is 426 and 939 for the years of purchase and sale, respectively. So, indexed cost of acquisition would be 55,10,563 [25,00,000 * (939/426)]. In the same way, adjust additional construction cost against inflation.
How is indexed cost of property acquisition calculated?
Answer ( 1 )
- Formula for calculation of indexed cost of acquisition.
- Index acquisition cost calculation = Purchase price of the property x CII of the financial year in which property was sold / CII of purchase year of the property.
How can I avoid capital gains tax on a flat sale?
You can avoid paying the capital gains tax on the property if you reinvest the amount in a new property. But, the exemption will sustain if you hold the new property for at least two years.
What is cost of acquisition with indexation?
When the indexation benefit is applied to “Cost of Acquisition” (purchase price) of the capital asset, it becomes “Indexed Cost of Acquisition”.
Can stamp duty be included in cost of acquisition?
Yes, registration charges and stamp duty value can be included in the cost of acquisition and should be indexed. 1) Stamp duty and registration cost are treated as part of cost of acquisition and will be indexed for the calculation of long term capital gain.
How do you calculate cost of acquisition without indexation?
Indexed Cost of Acquisition: Indexation is a mehod of calculating current value of payments made at a earlier time, by using price index….
Cost of Acquisition of the House | Rs. 15,00,000 |
---|---|
Cost Inflation Index of the year of Purchase – 1999-2000 | 389 |
Indexed Cost of Acquisition | 1500000*1024/389 = Rs. 39,48,586 |
Does acquisition include stamp duty?
Yes, stamp duty and registration charges shall form part of cost of acquisition of property and can be indexed. 1) Stamp duty and registration cost are treated as part of cost of acquisition and will be indexed for the calculation of long term capital gain.
Can I reinvest to avoid capital gains in India?
NRIs can invest in equity stocks and mutual funds, provided they abide by the Foreign Exchange Management Act (FEMA) provisions. The capital gains tax provisions for NRIs are similar to those for the resident individuals except for the applicability of TDS provisions.
What all can be included in cost of acquisition?
In accounting, the cost of acquisition is a line item that includes all expenses related to buying and deploying an asset except for any sales taxes. In sales and marketing, the cost of acquisition includes all the costs of acquiring new customers.
What if cost of acquisition is not available?
As the original cost of acquisition is not available, you may consider the cost as FMV as on 1 April 2001, in the proportion of your share. As per the Finance Act, 2020, such FMV can’t exceed the stamp duty value as on that date. Your share of LTCG will be taxable at 20\% (plus surcharge and cess).
Can I claim capital gains exemption on sale of two houses?
CAN CLAIM CAPITAL GAIN EXEMPTION BY INVESTING IN TWO HOUSES- Taxpayers can now obtain long-term capital gains exemption on sale of a house by investing in two houses where capital gains is less than 2 Crore rupees. Earlier, the exemption was available for investment in only one property.
What are the tax implications when you sell your property?
Property is considered as capital asset under income tax law and its sale has wide range of tax implications. Govt. has imposed many restrictions on sale of property and has also allowed deductions and exemptions that can be claimed when someone sells his property.
What is the capital gain tax on the sale of property?
The capital gain tax is charged at 20\% with indexation. So the tax you have to pay is Rs.7,96,000. The short term capital gain is the difference between the cost price and the sale price of the property. You can also add the maintenance and property upgrade charges to reduce your short term capital gain.
What is the tax liability of the sold-out ancestral property?
The tax liability of the sold-out ancestral property depends on the capital gains and its norms. When the property is held for a period of more than 24 months from the date of acquisition, the gains from the property will be termed as long term capital gains. (LTCG). This capital gain is taxed at 20.8\% (including cess) with indexation.