rajat gupta (self) 10 February 2010

selling & buying

Dear distinguished members,

I am selling a plot of land that I've had with me for 5 years, and buying a house using the proceeds within a span of 3-4 months.

As the capital gain of plot sale is long term & non-taxable, I do not intend to show the property transaction in my income tax file. In case I am subject to IT scrutiny lateron, anyway I wouldn't have to pay any penalty as there wasn't any tax evasion in the first place. Is my understanding about not getting taxed upon scrutiny, correct ?

Thanks.

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2 Replies

A V Vishal (Advocate) 10 February 2010

Who said that sale of plot does not attract capital gains, you attract 54 F of the Income Tax Act and bound to pay tax on the LTCG or invest the amount of gain in any of the modes specified in the section.

rajat gupta (self) 12 February 2010

Thanks Vishal,

From your valued response, I gather that after sale of the plot, I should either pay tax on LTCG OR invest the gain in any modes specified in the section.

As I am opting for the latter and investing in buying the residential house, I am not doing tax evasion. Isn't it ?