Capital gain
SUPRIYA
(Querist) 25 August 2012
This query is : Resolved
how many month person can keep money with him to invest in capital gain bond if it`s sale of own property.
If i invested in 3 years lock in period.how much i tax will have to pay.
After 3 years i can use my money without any tax liability.\
pls advice.
THANKS
SUPRIYA
A V Vishal
(Expert) 27 August 2012
how many month person can keep money with him to invest in capital gain bond if it`s sale of own property.
6 months
If i invested in 3 years lock in period.how much i tax will have to pay.
Zero
After 3 years i can use my money without any tax liability.\
Yes
SUPRIYA
(Querist) 28 August 2012
Sir Thanks .
But I am not agree for 6 months to hold the money with us . with in a period of three month I have to invest in capital gain bond.
pls reconfirm sir
supriya
Anirudh
(Expert) 28 August 2012
Dear Supriya,
First and foremost, you have to be clear about certain things. If the property which you are proposing to sell was acquired by you more than three years ago (i.e. if the property was in your hands for more than three years) then the difference between the Sale proceeds and the indexed cost of acquisition will attract long term capital gains tax.
Long term capital gains tax is 20% of the gain.
One can get exemption from payment of the capital gains tax by adopting any of the following methods:
(i) by utilising the entire amount of capital gain in purchasing a property - either one year in advance to the sale or within two years from the date of sale or by constructing a property within three years from the date of sale.
(ii) In case the amount of capital gain cannot be utilised before the furnishing of the Income Tax Return for the year in which the property was sold, then by depositing the said amount of capital gain in an account in bank or institution as may be specified by the Central Govt.
(iii) If the amount so deposited in the bank account mentioned at (ii) above is not utilised in either constructing the property or purchasing the property, then the said amount of capital gain will be taxed as income of the previous year in which the three year period of deposit expires.
Thus, your understanding that you can deposit the amount for three years and then after three years withdraw the same, WITHOUT PAYMENT OF TAX is not correct.
You will get exemption from payment of tax only if you utilise the entire amount of capital gain in either purchasing or getting cosntructed a new house.
SUPRIYA
(Querist) 28 August 2012
Dear sir,
Thanks a lot .excellent advice given.
Regards
Supriya
