how to calculate capital tax?

First you have to find out the value of the house as on 1-4-1981. This is must because the value of your house as on 1-4-1981 will be treated as your purchase cost/Value of the house as on 81-82.

Calculation: (Model)

Inflation Index as on 1981-82= 100

Inflation index for FY: 920 (Approximately +/-5)

Say the cost of your house as on 1-4-1981 is Rs.1 lakh.

Assume that you are selling your house for Rs.40 lakhs now.

Your house cost as per inflation index will be: 1,00,000 x 920/100= 9,20,000

Your gain on which you have to pay 20% tax at flat rate will be: 40L-9.2L=30,80,000

Tax there on : 20% of Rs.30,80,000= Rs.6,16,000

You have to pay Rs.9,16,000 tax. This is just example. Calculate your gains like this.

If you do not know the cost of your house as on 1-4-1981, then assume some amount or take the cost as ZERO.

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http://www.gsoftnet.blogspot.in/2012/09/latest-cos...

In your case it will be Long term Capital Gain. Calculate capital gain as given:

Suppose Fair Value of house as on 1/4/1981= 100000

Sale Value now = 1000000

Long Term Capital Gain will be = 1000000 - 100000 * 939/100= 61000

(Here 939 is cost inflation index for F.Y. 2013-14 and 100 is cost inflation index for 1981-82)

Cost inflation index for the financial year 13-14 is published recently.

To get the Fair market value on 1/4/1981 of the house, take the municipal circle rate for that year from the authorities or get the house valued from an approved valuer for that year.

For calculating long term capital gain following formula is applicable

(A) Sale Price of House (See note below)

Less- Indexed cost of house (See note below)

(B) Long Term Capital Gain

Long Term capital gain is taxable at the rate 20%, However you can get the tax exemption by investing amount of capital gain under section 54EC in specified bonds or can construct or purchase new house under section 54.

Note-

Sale price of house be taken according to provision of section 50C of the Income Tax Act 1961, according to this section sale price of house will not be less than amount considered by stamping authority for stamp duty at the time of sale.

Indexing of cost is done as under

Purchase price of house X Cost inflation index of year in which property is sold/ Cost inflation index of year in which property purchase or 100

The HELOC would not be sure into your taxes. you obtain the abode for $ninety six,000. in case you place any advancements into the abode, on an identical time with a sparkling kitchen, new roof, upload those advancements. The sum is the assumption of your abode (there are diverse additions and subtractions obtainable besides). Ignoring any differences to the assumption, your income is the version between the merchandising cost (guidance superhighway of commissions) and $ninety six,000. So enable's say $3 hundred,000. If it quite is your necessary place of residing, your taxable capital income is $50,000. you're exempt from $250,000 of your income. counting on your tax bracket, the tax in this income is at maximum $7,500, or 15%. it quite is obtainable to pay lots much less in the experience that your tax bracket is below 25%.

Get the value on date 01/04/81 and the value of cost of acquisition whichever is higher multiplied by 852/100 and plus the cost of improvement which ever is made and multiplie the index to cost of improvement the total of cost of acquision and improve less from net sale consideration received