Tax liability

Hi

If you are investing in fixed deposits, the capital gains shall not be exempt. You will have to pay capital gain taxes.

To exempt capital gains, you can either invest in a residential house property or 54EC bonds.

Hi,

There are 2 parts to your question.

Firstly, the sale proceeds of the sites will be subject to capital gains. So depending on the price at which you bought the site, you will need to pay Capital gains on the difference. To be exempt from the capital gains tax, you will need to invest the sale proceeds in a residential apartment or in the bonds as specified under section 54EC.

Secondly, regarding investments in FD's, the interest will be taxable. However, if you do not have any other source of income, then the interest on Rs. 11 lakhs will be below the taxable threshold and there will be no taxes.

But if you invest in FD's you will have to pay Capital Gains tax.

Hope that clarifies.

Regards,

Nikhil.

Deposit some amount in REC bonds for which you can avail exemption and deposit some funds in FD for handsome interest. for FD amount you will not get exemption. Lock in period for REC bonds is 3 years

Thanks

As it was a capital gain the exemptions allowed under sections 54 are clear. If you invest in any other residential house, investment in Rural Electrification corporation only you can claim. if you want you can invest under capital gains account schemes with banks (its similar to FD) to the limited period. If you are about to purchase a residential house you can hold the investment in CGAS till 3 years (if u construct) 2 year (if you purchase). If you want to invest in any other fund to claim exemption from tax you can invest in rural electrification corporation funds.

Hi,

You will have to calculate capital gain from sale of these sites. If capital gain is there, then in order to save taxes, you will have to invest the amount in another house property or in specified bonds. You can put money in FD.

Please feel free to call/ revert in case you need more clarity.

Thanks and regards

Abhishek Dugar

CA CS B.Com

If you invest sale proceed in FD ,you have to pay capital gain tax..in order to save capital gain tax you need to invest in residential property or in REC bonds.

Hi,

You will have to invest the amount in your name only, since your father was not party to the sale of property.

You can invest the same in Capital Gains Scheme of Banks or go for REC/ NHAI Bonds.

In all the cases, interest shall be taxable.

Regards,

Hello,

The income earned by you on selling of the website is taxable, so is the interest income which will be generated from the Fixed Deposits.

Trust this clarifies your query.

Feel free to call / get back in case of further clarifications.

Thanking You.

Regards,

Rohit R Sharma

BCOM, FCA, LLB, CERT. FAFP