Capital gain tax long term

Querist : Anonymous (Querist) 20 March 2011 This query is : Resolved
Sir , to save LTCG tax in case of sold plot in what time period one has to buy another plot to reinvest and then in what period he can construct house on it to take advantage of LTCG tax exemption.

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preet (Expert) 21 March 2011
before filing the income tax return you have to bye another plot.

R.Ramachandran (Expert) 21 March 2011
One can claim exemption from LTCG tax, provided the entire amount of capital gains is invested in the new property within 3 years from the date of sale. Further if the entire amount is not utilized within 31.03.2011 then the balance amount needs to be deposited under the CGA scheme and utilized within the said period.

MUKESH SHARMA (Expert) 27 March 2011
DEDUCTIONS FROM LONG TERM CAPITAL GAINS

Apart from the deferences in mode of computation and tax liability, the LTCG is eligible for certain deductions. These dedications are available in the following circumstances

a)
The LTCG is arising due to sale of a residential unit and investment is made in a new residential unit;

b)
The LTCG is arising due to sale of an agricultural land and investment is made in a new agricultural land

c)
The LTCG is arising on compulsory acquisition of lands and buildings of an industrial undertaking and investment is made for purchase of land or building to shift or re-establish the industrial undertaking;

d)
The LTCG is arising from transfer of machinery or plant or building or land of an industrial undertaking situated in an urban area and an investment is made on machinery or plant or building or land for the if purpose of shifting the industrial undertaking to any area other than urban area;

e)
The LTCG is arising on sale of asset other than a residential unit and investment is made in a residential unit;

f)
Investment in financial assets.

g)
Investment in equity shares.

MUKESH SHARMA (Expert) 27 March 2011
Long Term Capital Gain from the Transfer of a Capital Asset other than Residential House Property (Section 54F)
The exemption is available only an individual or a HUF who transfers (or sells) a capital asset that results in a long-term capital gain, and then invests the amount of gain in acquiring a new residential house. This exemption is available subject to fulfillment of the following requirements:
(i) The transferor assessee should purchase or a residential house in India within a period of one year before or two years from the date of transfer or construct a residential house within three years from the date of the transfer of the original house. (Construction must be completed within these 3 years.), and
(ii) The new house property purchased or constructed has not been transferred within a period of three years from the date of purchase or construction.
(Not covered: Amount of exemption, scheme of deposit and consequences on not meeting the requirements).

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