Question


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Tax on CAPTIAL GAIN AMOUNT for flat.Please help?

In 2007 years back I had given a advance of Rs 7 lakhs (White) to a builder for my flat. Building was under construction and that time till today. Till date I only have flat allotment letter from builder, agreement for flat is still pending. Because of slow work I told builder to return my money with interest. Now he is giving re 13 lakhs in white on my name. Builder is not ready to give any amount in BLACK. I will be buying a new flat till this December 2009.Please let me know if I put this amount (White) in my bank account, do I need to pay additional tax on it or not. Someone told me this will come in CAPTIAL GAIN and if I use this money in some other property in 1year time, than I need not pay any tax on the same. (Income from asset reinvestment in same asset is exempted as per sect 54 (i.e capital gain) Please guild me on the same.

1 month ago - 2 answers

Best Answer

Chosen by Asker

The difference between Rs.13 lakhs and 7 lakhs, that is Rs.6 lakhs, cannot be treated as capital gains. It will be treated as income from other sources and you have to pay tax on this 6 lakhs at normal rates (as per slab) along with your other income.

by N J Reddy

1 month ago

Asker's Rating: 

Other Answers

FIRST OF ALL BE CLAER THAT CAPITAL GAIN OR LOSSES ARISES ON SALE OF ANY CAPITAL ASSETS , HERE U PURCHASING NOT SELLING ANY THING ,,,, SCONDLY , THE ADVANCE OF RS 13 LAC IS NOT FULLY SUBJECTED TO TAX , BUT ONLY RS 6 LAC , BECAUSE RS 7 LACS WAS ADVANCE N THE REMAINING 6 LACS WILL BE TREATED AS INTEREST INCOME FROM OTHER SOURCES ON WHICH U HAVE TO PAY TAXES ,

by SAIBAL- 1 month ago