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Purchase Price - Rs. 1000000
Year of Purchase - 1995
Sale Price - Rs. 2500000
Year of Sale - 2008
Cost Inflation Index (CII) - Purchase - 281
Cost Inflation Index (CII) - Sale - 582
Calculate
Indexed Purchase Price
Capital Gain
Tax with Indexation (20%)
Tax without Indexation (10%)
Capital gain = sale price - (purchase price*(cii sale/cii price))
= 2500000 - (1000000*(582/281))
= 428825.7
Tax without indexation = 1500000 × .10 = 150000
Tax with indexation = 428826 × .20 = 85765
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Mr X purchased a house property for Rs. 1,00,000 on 31st July 2001. He constructed 1st Floor in March 2003 for Rs. 1,10,000. The house property was sold for Rs. 5,00,000 on 1st April 2005. The expenses incurred on transfer of asset is Rs. 10,000. Find the capital gain.
[2000-01-index is 406 and 02-03 index is 447 and 05-06 Index is 497]
a. 2,40,238
b. 2,40,832
c. 2,45,282
d. 2,45,832
Ans - c
Solution :
Taxable long term capital gain = sales consideration-selling expenses-(indexd cost of acquisition and improvement)-(Ded under 54 54B D G GA F EC)
= 500000 - 10000 - (100000x497/406) - (110000x497/447)
= 500000 - 10000 - 122414 - 122304
= 500000 - 254718
= 245282
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