I bought a flat in Coimbatore for 11 lakhs in 2007.Now, I have an offer of Rs 21 lakhs for the flat. Is the difference amount taxable? If yes then what would be the taxes I would have to pay? I wouldn't be willing to sell it if the taxes are too high. Please advice me as soon as possible, thanks.
Answered on November 08, 2017
Tax liability will arise on capital gains arising out of difference between sale consideration and purchase consideration. The said gains will be considered as long term capital gains or short term capital gains based on the period of holding of the property. If the property is held by you for a period more than 24 months than the same will be long term else short term. Assuming that the sale will take place in 2017 your sale of flat will be a long term assets sale. Indexation will be available on the purchase consideration as the asset is long term assets.
Tax rate on long term capital gains will be @ 20% plus surcharge (if any) and the tax will be increased by cess @ 3% .
Tax rate on long term capital gains will be @ 20% plus surcharge (if any) and the tax will be increased by cess @ 3% .
