Capital Gains

Hi

You only need to invest the capital gain amount which will be less than 20 lacs as indexed cost of acquisition shall be considered for calculating capital gains.

You can also invest in section 54 EC eligible bonds wiring 6 months of sale which shall be redeemable after 5 years.

Since you will be selling after June 20, it would be a long term capital gain and thus exemptions are available.

Only the investment of capita gain amount has to be in a residential house property or the specified bonds. Remaining consideration could be invested elsewhere.

There are no exemptions in case of short term capital gains.

Dear Sir,

Hope you are doing well !!

You need to invest only capital gain amount to get full exemption.

The capital gain amount would be ~ RS 19 lakh after considering indexation.

Also, you can invest the capital gain amount in 54EC bonds to get full exemption.

It is advisable to take a phone consultation for detailed discussion.

Considering 40 lacs as capital gains, investment can be made in following options to claim capital gain exemption:

1. One house property for 40 lacs

2. One house property for 20 lacs and another for 20 lac

3. One house property for 20 lacs and one land of 20 lacs ( construction of house is a must within 3 years,)

4. 20 lacs in a house property and 20 lacs in bonds.

There can be more combinations possible but the maximum no. Of house properties shall be 2. And such option of investment in 2 properties and claiming capital gain exemption is once in a lifetime option. If you have capital gain in future, you can invest in 1 residential house property and claim capital gain exemption.

You are going to sell the flat next month so it would be more than 24 months and hence long term capital gain.

To save capital gain tax you just need to invest the capital gain amount which would be somewhat less than 20 lakh as indexation would be applied and other such things.

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 as new scheme was introduced by CBDT to claim exemption of two house if capital gain is below 2 crore.

Hello,

For capital gain exemption, you need to invest the capital gain amount. It would be below Rs. 20 Lakhs after taking indexation into consideration.

I hope this answer satisfies your requirements. 

Regards,

CA Hunny Badlani

Investment can be made in residential property or specified bonds. Investment can be made in multiple properties but not more than two.

Your flat is a long term asset as it is held for more than 24 months. This period was reduced to 24 months from 36 months from FY 2017-18.

You need to invest the capital gain amount and not the entire sale proceeds.

You can invest in upto two house properties. Exemption is not available for land.

It would be long term capital gain and thus exemptions are available.

Yes, you can invest the same in 2 flats.

- If the flat was purchased in June 2018 and sold in July 2020 then it would be a long term capital gain. There is no exemption available in case of short term capital gain and it is taxable at normal slab rates instead of concessional rate of 20% as in case of LTCG. It is better to sell it after 24 months which is about to lapse. In case of STCG, gain would be Rs.20 lacs minus the brokerage if any. In case of LTCG, gain would be 17.75 lacs and tax would be Rs.3.69 lacs.

- Exemption would be available either for investment in bonds or house property. You can invest into 2 houses only which is a one time option.