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Short term capital gain on Sale of House property
May 28 2012 , 01:46 PM   #21
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guys - can we come back to the original discussion point regarding planning of taxes on Short term capital gain...would be really helpful for lot of people incl me!!!

Thx
May 28 2012 , 01:56 PM   #22
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Guys

I have a query.
in a given situation: I got the possession of my flat 3 years back and registery got done 2 year back . when I sell my flat now after 3 years when I took possession., can I save tax on long term capital gain by investing the gain in residential?
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May 28 2012 , 02:12 PM   #23

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Quote:
Originally Posted by cookie
Guys

I have a query.
in a given situation: I got the possession of my flat 3 years back and registery got done 2 year back . when I sell my flat now after 3 years when I took possession., can I save tax on long term capital gain by investing the gain in residential?
yes you can save all the long term capital gain tax by reinvesting the whole amount into residential property with 2 years after sale of property . Or u can buy bonds (upto 50lacs) with that money to save LTCG ON THE SALE of your property with in 6 months from the date of sale.
May 28 2012 , 02:17 PM   #24
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Quote:
Originally Posted by purple
yes you can save all the long term capital gain tax by reinvesting the whole amount into residential property with 2 years after sale of property . Or u can buy bonds (upto 50lacs) with that money to save LTCG ON THE SALE of your property with in 6 months from the date of sale.
thanks for reply.
is it not 3 years at least?
May 28 2012 , 02:23 PM   #25

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after the purchase of property till 3 years it is short term capital gain and after that it is long term capital gain . And within 2 years one have to reinvest in any residential property to save on LTCG completely . Or either invest in ( specific bonds) (but this could be upto 50 lacs) . Or if there is any shot term capital loss from share market or any other kind that can be used to offset both ( STCG and LTCG)
May 28 2012 , 02:27 PM   #26
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Quote:
Originally Posted by purple
after the purchase of property till 3 years it is short term capital gain and after that it is long term capital gain . And within 2 years one have to reinvest in any residential property to save on LTCG completely . Or either invest in ( specific bonds) (but this could be upto 50 lacs) . Or if there is any shot term capital loss from share market or any other kind that can be used to offset both ( STCG and LTCG)
thanks bhai
July 2 2012 , 03:49 PM   #27
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I am looking for guidance on calculation of Short Term Capital Gain.

Previous replies in this thread says that below list of items can be deducted while calculating STCG. Please confirm.

1. Brokerage Paid.
2. Interest Paid to the Bank on loan.
3. Transfer Fees to the builder

Please tell me if there are any other expenses which can be deducted or these are the only 3 items.
July 3 2012 , 01:20 AM   #28
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Quote:
Originally Posted by jollyboy
I am looking for guidance on calculation of Short Term Capital Gain.

Previous replies in this thread says that below list of items can be deducted while calculating STCG. Please confirm.

1. Brokerage Paid.
2. Interest Paid to the Bank on loan.
3. Transfer Fees to the builder

Please tell me if there are any other expenses which can be deducted or these are the only 3 items.
I am not sure if '2. Interest Paid to the Bank on loan' is deductible...also, if interest paid on borrowed money from frnds/ relatives can be adjusted agst the stcg...

However, stcg is added to the individuals tax slab and stcl/ ltcl can be adjusted agst it...so accordingly one can think of booking some loss (in equity/ house property etc)...but not too many avenues...i left couple of good deals myself as buyer wasnt willing to pay much of cash premium or bear the tax impact...better be in compliance!!!
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July 3 2012 , 12:37 PM   #29
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IMO,

selling an under construction property is neither STCG nor LTCG. It is plain extra income. For STCG, you have to sell a house. An under construction flat is not called a house at all. It is just a booking/agreement. It becomes your house only when you register it. That day is the birth day of the house. Applying house laws to it is like applying citizen's laws to fetus.

So, if it is just additional income, all the expenses that went in earning it should be deducted to arrive at net profit.
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July 17 2012 , 03:55 PM   #30
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No clear guidance from IT on under construction property but based on judget of few cases, holding a flat booking for more than 3 years will come under LTCG.

Interest treatment is done differently & cant be set off against STCG. Only brokerage, transfer charges are eligible for deduction out of STCG.

One can book short term equity loss options to set off STCG - e.g. using bonus options. Do google or check caclub portal for more details or get in touch with a CA.
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