Capital gains

Dear Sir,

Hope you are doing well !!

1.  You need to pay only capital gain tax in the year of withdrawal. 

2.  If you buy commercial property then you will not get any tax exemption.

3.In case if you purchase new under construction residential property, you will get one year extra for capital gain exemption.

However,the new property should be ready within three years of the old property’s sale.

4.LITC is chargeable @20.8% i.e. you need to pay 20.8% on Rs 36 lakh.

5.No,funds can be withdrawn from CGAS account only for purchase or construction of house 

The investment should be in residential property - whether it is old or new under construction.

Yes, if you purchase a residential plot in may 2019 and immediately construct house within next few months you will be eligible for tax exemption.

Yes, you can buy a residential plot/land with this money.

However, the residential house property must be constructed within 3 years of sale of the property/asset

There are two types of Account in capital gain Account scheme one for purchase of property which you need to use within 2 years and other for construction of house which you need to use within 3 years. Now if you are not able to use it within 2 years and you say that you will purchase a plot and construct house within few months then you can use that money and construct your house and you would be eligible for exemption.

But at the time of filing your return of income you must have mentioned the date by which you will purchase next property and because of that income tax can raise a query but you can claim such exemption.

If you need any help in income tax related work do let me know.

Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.

Thank you

1. You need not to pay tax if you can construct a property within 3 years from the date of sale. That means even if you buy an under-construction property which is completed before 3 years from the date of sale, you need not pay capital gain tax.

2. No. Property should be residential

3. refer point 1

4. 20.8% of 36 lacs . I am assuming capital gain is 36 lacs.

5. No

Yes, you can buy a plot and immediately construct a property on it to save taxes.

- You can purchase the residential house property within 2 years from the date of transfer and can construction within three years. Maximum time limit available is 16.04.2020, in which you can purchase the plot and get the construction completed by 16.04.2020.

Hi,

Yes, you can use the money for buy plot and then construct house on it.

But you will have to construct the residential house on it within 3 years from the date of sale/transfer.