NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Capital Gains
Caselet: Mrs Iyer, a resident, sold a residential house bought in 2012 for ₹60 lakh. The sale price was ₹1.50 crore and she paid ₹3 lakh in transfer expenses. Within the allowed period she bought another residential house in India for ₹70 lakh. She opts for the 12.5% rate without indexation and claims Section 54. Ignoring surcharge and cess, what is the tax on the long-term capital gain?
The tax is ₹2,12,500. The gain is ₹1.47 crore net sale value less ₹60 lakh cost, which is ₹87 lakh. Reinvesting ₹70 lakh in a new house is exempt under Section 54, leaving ₹17 lakh taxable at 12.5%.
- A₹2,12,500Correct
- B₹3,40,000
- C₹8,75,000
- D₹10,87,500
Explanation
The net consideration is ₹1,50,00,000 − ₹3,00,000 = ₹1,47,00,000. The gain is ₹1,47,00,000 − ₹60,00,000 = ₹87,00,000. The Section 54 exemption equals the amount reinvested, ₹70,00,000, leaving ₹17,00,000 taxable. At 12.5% the tax is ₹2,12,500. ₹10,87,500 ignores the exemption, ₹8,75,000 taxes the amount reinvested, and ₹3,40,000 uses 20%.
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