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Selling Home: What is the tax implication when I sell my house.

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  1.  
    • CommentAuthorkavita
    • CommentTimeOct 14th 2007
     
    • Answers: 1
    • Joined: Oct 14th 2007
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    We have 2 adjoining flats in Ulhasnagar.One Flat No1 is in the name of my father in law who has recently passed away.The nominee is my motherinlaw.The other flat Flat No 2 is in the name of my mother in law.
    Flat No 1 was bought in 1973 for Rs 40,000 and the Flat No 2 was bought in 1990 for Rs1.5 lacs.
    Today if some buyer wants to buy both together for Rs 15lacs.How should we calculate the tax liability.
    How much should the money be taken in white and how much in black?
    •  
      CommentAuthorvikram
    • CommentTimeOct 15th 2007
     
    • Answers: 104
    • Joined: Jun 20th 2007
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    You are liable to pay income tax on the profit (capital gains) worked out according to cost inflation index. Since it is the residential house, you would have got the benefit of tax exemption only on repurchase of new residential property. The cost inflation index for the financial year 2006-07 is 519. The calculation of capital gain tax on property is:-

    Sale price Minus the Cost of acquisition X cost inflation index of the year in which asset is sold (divided by) cost inflation index of the year of acquisition. The resultant figure is capital gain on which you are liable to pay income tax.

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