Capital gain tax and investment of money
Pradeep Nandlal Dave
(Querist) 30 December 2019
This query is : Resolved
Dear Sir,
We have sold our flat situated in Virar(Maharashtra State),which was in my wife name and myself.
We purchased it in 1990 and sold in Nov;2019.
So,we have to pay capital gains tax.
To avoid capital gain tax:
A)where it should be invested?
B)can entire received amount to be must be invested?
Please help me.
Pradeep Dave
kavksatyanarayana
(Expert) 30 December 2019
please consult local CA for better guidance. or ask the query in CAclubindia.
Sb Karma
(Expert) 31 December 2019
please read your answer as follow-----
A)Invest in another House(Resi.)
B)Yes you need to invest all...or if you invest 75% on buying house then you can invest 25% on other house too
or if you totally invest 75% on purchase of house then remain 25% will be calculated in CG tax.
Sb Karma
(Expert) 31 December 2019
And yes... one more thing you need to calculate through inflation index too...so don't forget to go through inflation index
T. Kalaiselvan, Advocate
(Expert) 02 January 2020
Gains arising from the transfer of any long term capital asset (being land or building) are exempt under section 54EC if the assessee has within a period of 6 months after the due date of such transfer invested the capital gain in long term specified bonds as notified by the Govt. for a minimum period of 3 years.
Exemption under Section 54 is available on long-term Capital Gain on sale of a House Property.
To claim full exemption the entire capital gains have to be invested.
In case entire capital gains are not invested - the amount not invested is charged to tax as long-term capital gains.
This exemption will be reversed if you sell this new property within 3 years of purchase and capital gains from sale of the new property will be taxed as short-term capital gains
If the cost of the new residential property is lower than the total sale amount, then the exemption is allowed proportionately. For the remaining amount, you can reinvest the money under Section 54EC within 6 months.
The property must only be bought on the name of the seller and not on anybody else's name.
If the builder of the new residential construction fails to hand over the property to the taxpayer within 3 years of purchase, the exemption is still allowed.
ashok kumar singh
(Expert) 03 January 2020
agreed with the earlier expert's opinion.
Thanks" & Regards'
Ashok Kumar Singh,
Advocate
Hemant Agarwal
(Expert) 06 January 2020
1. "Entire" Long Term Capital Gain (LTCG), MUST be invested by Seller/s:
a) Within Two years in a ready Residential House
b) Within Three years in a Self-Constructed House
c) Capital Gain Bonds (REC, NHAI, PFC, .... ,by Govt.)
d) Capital Gain's Account with Bank
2. HOWEVER, you are legally eligible to claim LTCG, "ONLY" if such sold property was declared in your Income Tax Returns (ITR).
Keep Smiling .... Hemant Agarwal
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