Land logic

I purchased a piece of land in 1986 for Rs 7,999. In my balance sheet for 2009-10, it was valued at Rs 30,000. I sold the property for Rs 8,00,000 on March 10. What will be my long-term capital gains tax? How can I get exemption from long-term capital gains tax?



To calculate your capital gains, first find out the cost inflation indices corresponding to the year of purchase and the year of sale of the property. The income tax department releases this index every financial year. The cost inflation multiplier for you will be determined by the index of the financial year in which the property was sold divided by the index of financial year in which it was bought. Multiply your cost of acquisition by this cost inflation multiplier. The difference between the sale price of the property and the inflation-adjusted cost price will be your long-term capital gains. By investing the amount in bonds of NHAI and REC, you can claim exemption from capital gains tax.