All posts by Vidyadhar Naik

Property Consultant I Founder Bangalore Real Estates I Member BRAI I Expert-Times of India Group I Blogger on Bangalore Real Estate Market Trends I

Bangalore Hosur Road

I Overview I  Features I Landmarks I Photos and Videos I
 Property ID-0022/2014/JD

Land Area: 04acres

Sale Type: JD for High Rise Apartments

Location: Bangalore-Hosur Road Bangalore Near Attebele Check Post

For Details Contact: M:9035611299  E mail:vmnonline@gmail.com

About Bangalore Hosur Road -Near Attebele check post
This is a very prime location on Bangalore- Hosur Road and is just 18 km from ITPL, 16 km from Outer Ring Road (Bellandur-Marathalli) and 16 km from Electronic city. All the basic facilities are available in this locality.Excellent locality with many international schools,Hospitals and Markets surrounding the area .

Locality Recommended For:

Single Professionals Retirees Family
 

 




 

How to calculate your long term capital gain tax in property sale

Know how to calculate your long term capital gain tax in property sale and save money when you sell property.  By Vidyadhar Naik, Property Consultant Bangalore. M:9035611299

People buying property for investment purpose and selling it after some time has become common among Indians in the last 10 years. I am writing this article to know the tax implications involved in property sale from the long term capital gain point of view in property sale.

What is capital gain?

A capital gain is a profit that results from a selling of stockbond or real estate etc. The gain is the difference between a selling price and purchase price. Capital gains may refer to “investment income” that arises in relation to real assets, such as property; financial assets, such as shares/stocks or bonds; and intangible assets.

Types of capital gain:

Short Term Capital Gain: If property is held for less than three years before selling it, then it is considered a short-term capital gain (STCG) and one has to pay tax according to your normal income-tax slabs

Long Term Capital Gain: If property is sold after three years, then it’s considered long-term capital gain (LTCG) and one has to pay 20% of the profit as tax.

What is Cost Inflation Index?

It is a measure of inflation that finds application in tax law, when computing long-term capital gains on sale of assets. The cost inflation index is issued by Central Direct Board of Taxes (CDBT). Asset purchased in 2014 normally would be higher than the year 2009. This is due to declining price of rupee year after year.

CII Chart

 

Year

Index

Year

Index

1981-1982

100

1997-1998

331

1982-1983

109

1998-1999

351

1983-1984

116

1999-2000

389

1984-1985

125

2000-2001

406

1985-1986

133

2001-2002

426

1986-1987

140

2002-2003

447

1987-1988

150

2003-2004

463

1988-1989

161

2004-2005

480

1989-1990

172

2005-2006

497

1990-1991

182

2006-2007

519

1991-1992

199

2007-2008

551

1992-1993

223

2008-2009

582

1993-1994

244

2019-2010

632

1994-1995

259

2010-2011

711

1995-1996

281

2011-2012

785

1996-1997

305

2012-2013

852

2013-2014

939

What is Property Acquisition Cost?

Property Acquisition Cost= Basic sale value + Improvement Cost + Stamp Duty + Registration Cost + Legal fees + Advertisement Cost + Brokerage + Others (Others: Any other cost involved in the process of acquisition    of a specific property)

What is Indexed Cost?

Indexed Cost     =         Actual Cost *      Cost Inflation Index of the Year of Sale/Cost Inflation Index of the Year of Purchase

Typical Example of Long Term Capital Gain Tax Calculation

A purchased property in July 2008 for a basic sale value of INR 3000000. He also paid in the process of acquiring the said property, Brokerage: INR 30000: Legal Fees: INR 15000: Registration and Stamp Duty: INR 200000. A spent INR 100000 for improvement of the purchased property in September 2009.A sold the property in January 2014 to B for INR 5500000. A paid brokerage INR 55000.

Acquisition Cost= 3000000+30000+15000+200000=3245000

CII value 2008-2009 = 582

CII value 2009=2010 =632

CII value 2013-2014 = 939

Indexed Cost  of acquisition         =         Actual Cost *      Cost Inflation Index of the Year of Sale/Cost Inflation Index of the Year of Purchase

=         3245000*939/582=5235489.4

Indexed Cost of Improvement =         Improvement Cost* CII of 2013-2014/CII of 2009-2010

=          100000-*939/632=148575.94

 

Calculation of long term capital gain

 

(Sale value-brokerage)-(Indexed Cost of acquisition + Indexed cost of Improvement)

(5500000-55000)-(5235489.4+148575.94)=609346.6

20% of 609346.6=12186.93 is the amount to be paid by A as long term capital gain tax.

Long Term Capital Gain Exemptions

a) The capital gains from the sale of a house if the taxpayer invests the gains in a residential property within two years from the date of sale or constructs another house within three years from the date of sale. One should not own more than one house, besides the house one is investing in.

b) Investment in Bonds issued by NHAI and REC with a maximum limit of INR 5000000 and a lock-in period of three years.

Capital Gain Account Scheme (CGAS)

If a property has not been identified and purchased before the return has been filed or before the due date for filing the tax return, whichever comes earlier, the money has to be deposited in a special account known as the Capital Gain Account Scheme (CGAS). Any withdrawal from CGAS should only be for payments to be made in relation to the purchase of the new property.

Types of Capital gain Account Scheme

Savings deposit account: Suitable for people who are planning to construct a house over a period of time with different stages of withdrawals. The amount withdrawn should be used for housing purpose only within 60 days from the withdrawal date.

Term deposit account: Suitable for for purchase of house with one time payment. Amy withdrawal from this account in a pre maturity period attracts penalty.

So be ready to get the best benefit of capital gain in property sale

LOCAL SPACE

Vidyadhar Naik-Property Consultant

Email:vmnonline@bangalorerealestates.in

 

 

Flats below 30 lakhs in Bangalore

Flats below 30 lakhs in Bangalore

Flats below 30 lakhs in Bangalore expected to be in more demand in the coming months in Bangalore. Bangalore is all set to see  increased  sale in housing from mid income group buyers in 2014. I list following factors for this expected good growth.

1Economic Environment:

CPI and Core Inflation value predicted to be under control. GDP likely to touch above 6 at the end of fourth quarter 2014-15 as per world Bank prediction. Over all it is going to be blend of transition and error correction year 2014-15 for India.

2 Housing Loan:

Housing Financial Institutions are getting equipped themselves with funds to support mid income group home buyers for housing loan. Recent arrangement of LIC HFL from overseas markets through external commercial borrowings (ECB) for $ 300  M  got approval from RBI is clear indication for this housing segment. Housing Financial Institutions are likely to target on flats below 30 lakhs in Bangalore

3 Infrastructure-Bangalore:

20-minute ride between the Kempegowda International Airport and the Hebbal flyover is on the verge of becoming a reality. First section of the six-lane measuring 3.7 kms elevated expressway along the Bellary Road and leading to the airport from Hebbal flyover to Kogilu Cross, after Yelahanka was made available to public on January 1st 2014. The two other sections of the expressway will be ready and thrown open to the public in 30 days. There are at least 20 major roads which are to be completed by April- May 2014. This will help buyers to look for houses in around theses area which are connected to major real estate corridors of the city. Road infrastructure development on the peripheral of NICE road has opened up new Real Estate corridor.

Metro Phase I to be fully ready by March 2015. Commercial operations between Peenya and Malleswaram would start at any day from now. Phase I span a length of 42.3 km and consist of 2 lines. M. G. Road to Byapanahalli in operation. Peenya to Nagasandra, Sampige Road to National College, National College to RV Road expected to be completed by DEC 2014.

The State government has decided to go ahead with the construction of a state-of-the-art peripheral ring road around Bangalore at a cost of Rs. 5,800 crore It would be a six-lane or an eight-lane road and the total length would be about 65 km.

State government trying its best and serious efforts to make infrastructure development of the city to fulfill its promises to Bangalore citizens and as well as keeping in mind coming MP Elections. These rapid developments would certainly reduce commuting time for Bangaloreans by 40% by the end of this year. Travelling time from dwelling places to work place or business place which is a major headache for Bangaloreans, likely to be solved in the next 12 months.

4 Civic agencies

BDA/BMRDA/BIAAPA/BMICAPA have put their norms and regulations in place. These agencies appear to be clearer about their responsibilities and their governing laws. This would create more confidence in buyers especially in mid income group who are looking for transparent buying process systems.CDP Plan of 2014 give clear picture about zoning areas and regulations. Metro Politian Committee expected to solve problems of Real estate community by making technical process and implementation corrections to obey  and implement High Court order in 3-4 months.

5  Real Estate Community:

Above and all entire Real estate community which includes Government Policy makers, Different Associations, Builders. Developers, Corporate real Estate houses, Property advisors and Consultants are evolving towards organized Real Estate sector.

I would like to conclude saying that Governments, Local Civic agencies, Housing financial institutions and organized real estate sector will provide a platform of fair and transparent deal for all buyers especially mid income group buyers in 2014. Let us also keep watch on inventory of unsold properties of the  year 2013-2014. Whether the sale comes from Information Technology professionals or investors for gain, but 2014 will be better one for  for flats below 30 lakhs in Bangalore

 

Following article may be useful to you:

http://bangalore-realestates.blogspot.in/2014/01/capital-gain-in-property-sale_11.html

 

LOCAL SPACE

Vidyadhar Naik-Property Consultant