Capital gain tax on property sale

You wont be able to claim any capital gain exemption since you are selling plot and purchasing plot.

If you want to save capital gain you either need to invest the capital gain amount in bonds u/s 54EC and remaining amount in plots or else invest entire amount in purchasing a residential property.

Or else pay capital gain tax and invest the above amount and show such 20 lakh as gift from wife.

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

Thank you.

- You can avail the exemption but you need to complete the construction of the property within 3 years. Until construction,you need to open capital gain account scheme.

- You can also invest in bonds.

Hi,

Hope you are doing well !!

For claiming exemption from capital gains, investment can be done in :

1. Residential house property under section 54F: Invest in a ready to move in property within 2 years of sale or purchase land and construct a house property within 3 years of sale.
   
2. Eligible bonds under section 54 EC: Invest with 6 months of sale. Such bonds shall be redeemable after 5 years.The maximum amount you can invest in this way is Rs. 50 lakh. 

If you do not get a chance to invest in a profitable property immediately and still want to save your long-term gains from being taxed, you can invest your capital gains in CGDAS by approaching any public sector bank. The timeframe for the purchase or construction of the property remains unchanged in this case as well. But you can utilise this account momentarily so that you save your gains from being taxed and have more time to finalise a property for reinvestment.

It is required to deposit such unutilised capital gain in the capital gains account before furnishing return of income but not beyond due date for furnishing return of income.

Please note that in order to claim exemption, you need to invest the capital gain amount if a house property is sold. However, in case of sale of a land, entire sales consideration needs to be invested.

Hello,

You have sold a plot, therefore you can get capital gain exemption under Sec. 54F for which you need to invest in a residential house within the next 3 years. Since you are planning to invest in the plot only, to get an exemption under Sec. 54F you need to invest in a residential house by either purchasing one within the next 2 years or constructing one within the next 3 years.

Otherwise, you have to option to invest in specified NHAI or REC Bonds under Sec. 54EC to get the exemption from capital gain.

I hope this answer satisfies your requirement.

Regards,

CA Hunny Badlani

No exemption available for investment solely in plots. 

Yes sir since you are selling plots and purchasing plots you need to pay capital gain tax as there is no exemption available from capital gain on sale of plot if you purchase plot as already mentioned by me.

You must either invest the entire sale consideration to purchase a residential property or construct a residential property on such plot within 3 years to save capital gain.

Hi,

In the above scenario, you can not claim any exemptions.

For claiming exemption from capital gains, investment can be done in :

1. Residential house property under section 54F: Invest in a ready to move in property within 2 years of sale or purchase land and construct a house property within 3 years of sale.
   
2. Eligible bonds under section 54 EC: Invest with 6 months of sale. Such bonds shall be redeemable after 5 years.The maximum amount you can invest in this way is Rs. 50 lakh. 

No exemption for the purchase of only plots.