I bought a commercial property in New Delhi in April 1988 for Rs3,03,408. I am selling it for Rs82,56,000. How do I calculate my long-term capital gains?
—R.K. Sharma
As you have held the property for more than 24 months, the gains arising from the sale would be taxable as long-term capital gains (LTCG). The difference between the net sale proceeds and the indexed cost of acquisition and improvement of the property is taxable as LTCG at the rate of 20.60% (plus applicable surcharge).
Since you acquired this property before 1 April 2001, you have the option of treating its fair market value (FMV) of as on 1 April 2001 as the cost of acquisition and improvement while computing taxes, instead of actual costs.
Here is an illustration of how LTCG is calculated, assuming the year of sale is FY19. The Cost Inflation Index (CII) for FY19 is yet to be notified, so the CII notified for FY18 has been used.
