We have a house in West Bengal which is estimated at 60Lakhs.
We are planning to sell it.
Case1: We sell it and Pay appropriate taxes
What would be our inhand cash in the end.
Case2: Exchange
Now instead of selling it is the below possible
We ask the buyer to purchase 2 flats of 30Lakhs each and transfer the ownership to us.
We transfer the ownership of our house to the buyer.
What would be the best?
IMHO, it doesn’t really matter to the calculation of capital-gain, if one sells or exchanges.
Are you planning to claim exemption on capital-gains of sale of residential house per Section 54 of IT-Act ?
Hello @trader29,
In case-1, you can calculate the capital gains by deducting the indexed cost of acquisition from the sale proceeds. Indexed Cost of Acquisition is calculated based on the year you purchase the property and the year you sale the same. Tax will be levied on Capital gains based on Long Term or Short Term holding.
In case-2, it will be considered that instead of money, you have taken flats against sale of the house. The value of flats will be considered as sale proceeds. Tax will be levied on the capital gains arrived at after reducing indexed cost of acquisition from sale proceeds.
Against sale of house, if you purchase another house you can claim exemption under section 54. Or if you invest in specified bonds, you can claim exemption under section 54EC.
Hope this helps!
land. its around 2 Katha 5760 sqarefeet (as per online conversion)
cost of land would be 1lakh but that would be in 80s.
constructed 2005
Renovation/maintence cost over the years maybe 3 lakhs. But this is done in cash there is no documentation for this just and estimate
I am not sure of Section 54 of IT-Act. Just exploring my options
I am a quicko customer. do you provide consultation regarding this so that i can plan accordingly?
Hey @trader29
Yes, you can purchase Ask an Expert plan where a expert will provide you consultation regarding the same.