Capital gain

Exemption under Section 54F is available on long-term Capital Gain on sale of any asset other than a House Property.

If you are using your entire sale proceeds to buy a house property you may end up paying no tax on your gains when – You satisfy all these conditions

(a) You purchase ONE house within 1 yr before the date of transfer or 2 yrs after or construct ONE house within 3 yrs after the date of transfer.

(b) You do not sell this house within 3 yrs of purchase or construction

(c) This new house purchased or constructed must be situated in India

(d) You should not own more than 1 residential house (other than the new one) on the date of transfer

(e) You do not purchase within a period of 2 yrs after such date or construct within a period of 3 years after such date any residential house (other than the new one).

When you satisfy these conditions and invest entire sale proceeds towards the new house – you won’t pay any tax on your gains. However, if you invest a portion of the sale proceeds, the exemption will be the proportion of the invested amount to the sale price or exemption = cost of new house x capital gains/net consideration.

 

By Investing in Capital Gains Account Scheme

Finding a suitable seller, arranging the requisite funds and getting the paperwork in place for a new property is a time consuming process. Fortunately, the Income Tax agrees with these limitations. If you have not been able to invest your capital gains until the date of filing of income tax return (usually 31st July) of the financial year in which you have sold your property, you are allowed to deposit your gains in a PSU bank or other banks as per the Capital Gains Account Scheme, 1988. And in your return claim this as an exemption from your capital gains, you don’t have to pay tax on it. However, you must invest this money you have deposited within the period specified by the bank, if you fail to do so, your deposit shall be treated as capital gains.

 

Section 54EC (applicable in case it is a long term capital asset)–Purchasing Capital Gains Bonds

What happens if you do not intend to purchase another property, there is no use of investing the amount in a Capital Gains Account Scheme. In such a case, you can still save the tax on your capital gains, by investing them in certain bonds. Bonds issued by the National Highway Authority of India (NHAI) or Rural Electrification Corporation (REC) have been specified for this purpose. These are redeemable after 3 years and must not be sold before the lapse of 3 years from the date of sale of the house property. You are allowed a period of 6 months to invest in these bonds – though to be able to claim this exemption, you will have to invest before the return filing date. The Budget for 2014 has specified that you are allowed to invest a maximum of Rs 50lakhs in a financial year in these bonds.

Mother sold property in July 2015, buyer paid in instalments... Last one recd in 2017Jan......just before mother expired and Jan... Can we as legal heir invest in capital gains bond... Whose name should or be in...

Before tax your net income would be purchase price of the house /rs.5000000

sale price 1,7500000

investing th eprofit in purchasing  ahouse 75 00000

CAPITL GAINS17500000-5000000-7500000=5000000

YOUR LONG TERM CAPITAL GAINS TAX WOULD BE 20% OF 5000000=100000.

iF YOU GIVE ME THEMONTHS OF PURCHASE AND SALE OF OLAND/hOUSE i'D BE able to  calculate indexed cost and  Long term capital gain and how to save on tax.

Here you can get idea about how to save tax: Click Here

By making an investment in the Capital Gains Account Plan: Looking for a best suited seller, getting the paperwork done and making arrangements for the requisite funds for a new property takes too much time. Luckily, the Income Tax assent with these limitations. If you�ve skipped investing your capital gains until income tax filing returns date (of the fiscal year in which the property was sold), you are not permitted to deposit the gains in banks or PSUs according to the Capital Gains Account Scheme, 1988. This claim will act as an exemption from the capital gains and you do not have to make payment of any sort of tax. But, you should make investment of the money deposited within the specified interval of time by the bank. And if you fail in doing so, the deposit of yours shall be considered as the capital gains.