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Property tax is mandated by the laws governing the local civic body

Property tax is mandated by the laws governing the local civic body
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First Published: Wed, Apr 20 2011. 11 13 PM IST
Updated: Wed, Apr 20 2011. 11 13 PM IST
A flat was booked in August 1995 and possession was given in December 2004. The loan was paid off in these nine years. The flat is likely to be sold in April 2011. Which year’s cost of inflation index (CII) will be applicable for calculation of capital gains?
—V.K. Malik
Since the possession of the flat was taken in December 2004 and it is likely to be sold in April 2011, the resultant gain from sale of flat will qualify as long-term capital gain (since the flat was held for more than 36 months). Accordingly, long- term capital gain from the sale of the flat will be calculated under section 48 of the Income-tax Act as the difference between the full value of consideration received from the sale of flat. This value excludes expenditure incurred wholly and exclusively in connection with such transfer; indexed cost of acquisition; and indexed cost of improvement.
The indexed cost of acquisition is equal to the original cost of acquisition. The CII of the year in which the asset is to be sold is FY12 (CII yet to be notified). The CII of the year in which the asset was first held is FY05 (the CII for that year is 480).
I am 26 years old and have never filed income-tax returns till now as my salary was below the taxable limit. But recently with job change, I find my income taxable. When can I file returns?
—Mrinalini
The maximum exemption limit during FY11 is RS1.90 lakh for women. So if your total taxable income between 1 April 2010 and 31 March 2011 exceeds Rs1.90 lakh, then you will be obliged to file returns for FY11. The due date of filing tax returns for FY11 is 31 July.
I inherited a property in my village three years back. I hardly go to my village and have not paid any property tax. What will happen if I don’t pay?
—Charu Sharma
Property tax is levied annually on owners of properties and is based on the potential of revenue earned if the property is rented out or estimate of current market value if it is not let out. However, levy of property tax is mandated by the laws governing the civic body of the area in which the property concerned is located.
But there may be certain exemptions available to specific properties (vacant land in village abadi, land used for public charity/public worship places/burial grounds or any other specific exemption granted by law governing the specific body) prescribed under the law concerned.
If property tax is applicable and the person concerned defaults in making payment of such tax, the law stipulates payment of interest for delay in payment of property tax and measures to recover the outstanding property tax, which may even include attachment of the property in adverse situations.
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First Published: Wed, Apr 20 2011. 11 13 PM IST
More Topics: Ask Mint Money | Nitin Baijal | Property | Tax | CII |