Property sale Capital gain tax

[chris ivory]

My father bought land for 1 lakh (1991) and sold for 36 lakh (2015)

It was in the name of myself and my brother .

I got 18 lakh and another half gone to my brother account.

I have used this money to settle my home loan in 2015 for 14 lakh (Flat booked in 2012 - Home loan started in 2013)

I have left with 4 lakh remaining which i will use to settle the demand of the builder for the same flat - 2012.

I am in 30% bracket of around 13 lakh income group (paying 1.6 lakh income tax)

- Will my above transaction that i have used land proceeds money towards settling my home loan will qualify for NO capital gain property tax on me?
- I have left with 4 lakh in saving account,can i use it for short term FD in bank,as demand letter from builder is very slow?

[DR.MARIAPPAN GOVINDARAJAN]

Capital gain tax definitely attract in your case.

AI Summary

Capital gain tax applies on sale of jointly held land despite using proceeds to repay home loan. Sale of jointly held land (bought 1991 for 1 lakh, sold 2015 for 36 lakh) produced split proceeds; taxpayer used part to repay a home loan and planned to use the balance for builder demands or short-term deposits. The advisory response states that capital gain tax is attracted on the sale and that applying proceeds to loan repayment or short-term deposits does not eliminate the capital gains tax liability.