Anuj Puri, Chairman & Country Head, Jones Lang LaSalle India
- I have sold my flat for 95 lakh and now with this money am planning to buy a commercial shop for 98 lakh. Kindly let me know how much capital gain tax I have to pay.
If you bought the house more than 3 years before selling it, you are liable to pay long term capital gains tax. The tax rate is 20.6% of profits after indexation. Indexation is inflation adjusted cost of the property. Government of India provides CII (Cost Inflation Index) for every year. The original cost of asset is multiplied by the CII of sale year and divided by CII of purchase year. This provided indexed cost of asset, which is subtracted from the purchase price to obtain the profit amount which is liable to capital gains tax.
The tax liability – 20.6% of indexed profit – can be saved by investing in another residential property (within 1 year for new house or within 3 years if new house is being constructed). Exemption is to the extent of amount being invested in acquisition of such new residential property. In your case, since you are investing in commercial property, you will have to pay the tax on the entire capital gains amount.
- My office space of 200 sqft on the 3rd floor is in Moti Nagar main road, near Moti Nagar Metro station, New Delhi. What should be the better option – to sell this property and invest in residential property, or give it on rent? What should be the rent and price for the property I could expect?
The current rent in this area is varies anywhere between INR 45-60 per sq ft per month for commercial property depending on location, while the sale price is between 12,000-14,000 per sq ft. It looks a better option to sell this property and re-invest elsewhere.
- I am planning to buy a commercial shop opposite Kandeshwar Railway station facing a 20 meter Road. The project is by a reputed builder. Since I am not from Mumbai, could you please advise me the what would be a reasonable price range for the property, the rental I can expect in that area and the future prospects of that area in terms of appreciation?
Price range should be in the range of INR 10,000 – 12,000 per sq ft, while rental expectation may be between INR 25-30 per sq ft per month currently, though this is expected to improve going forward as more tenants move into this region. It is an emerging destination, close to the upcoming Navi Mumbai International Airport and hence appreciation should be healthy going forward.
- I want to buy a commercial property of around 350-400 sqft in Pune. In which locality should I buy this property so that I can get maximum appreciation in next 5 years?
You have not stated your budget, but some of the best areas in Pune to invest in commercial real estate include Magarpatta City, Kharadi and Kalyaninagar (for IT office space) and MG Road and Dhole Patil Road for non-IT space.
Purchasing real estate is not something that can be done overnight. You need to research and educate yourself about what properties you are interesting
thanks for this Q&A. Can you also brief reverse mortagage. I slightly confused with it.
Thanks for sharing!!
Good Answers. Thanks.