LTCG saving options for gain from sale of non listed shares

Dear Sir,

Hope you are doing well !!

You can claim an exemption from LTCG, under section 54F of the income-tax Act if the LTCG is reinvested in a new residential property located in India within the specified time frames. Where the new property is purchased, the gain is required to be reinvested either within 1 year prior to sale date or 2 years after the sale date. Where the new property is constructed, the time period prescribed for the reinvestment is within 3 years from the date of sale of the original asset.

Alternatively and/or additionally, you can invest the capital gains of up to Rs 50 lakhs in bonds of NHAI or REC, within six months of its accrual and get the exemption u/s 54EC.

Such bonds shall be redeemable after 5 years. Only interest received on such bonds shall be taxable. There would be no taxes on redemption after 5 years.

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 sold. However, in case of sale of a any other assets, entire sales consideration needs to be invested.

-Amount of capital gain would depend upon sale price, sale date, purchase price and purchase date by you. Please share the details with us for exact capital gain calculation.

-You need to pay 20.8% tax on capital gain amount.

-Home loan and Capital Gains Exemption are two separate things. You can claim the Capital gain exemption only if you use the money from the sale of the property to buy another house. The purchase of new house has to be done one year before the sale of the house or  2 years after the sale of the house.  The property should be bought in the name of the seller.  Income tax department is not concerned if you used the sale money for repaying the home loan or not.

We may assist you in capital gain tax calculation  and entire procedure.

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

Hi

You may claim capital gain exemption on the property purchased less than a year ago. Exemption would be available on entire investment and not just on outstanding loan amount. 

I assume it was not an under construction property.

There is no other exemption available in reinvestment criteria.

Also, such LTCG may be used to set off any capital loss.. not business loss.

Hi

You can have exemption under the head capital gains :

Section 54EC  Capital Gains shall be exempt to the extent it is invested in the long term specified assets (subject to a maximum limit of Rs. 50 Lakhs) within a period of 6 Months from the date of such transfer.

Section 54 F Any 

The losses from long term listed share can be set off against gain of unlisted long term shares.

The only exemption available against such gain is to invest in new house under 54F if you own only one at the time of sale of shares.

Yes you can claim capital gain exemption by paying off loan and you'll get exemption of entire amount if you fulfill all condition of 54F.

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

Thank you

1. LTCG can be set off against LTCL. It can be invested in units specified under sec 54EE.

2. Tax benefit on interest and principal amount can be claimed if you have received the possession of property.

Are you looking to sell the property. You will sell it only after the loan is repaid. Please elaborate about your LTCH query.

Hello,

If the house property was acquired within one year before the date of sale of such shares, capital gain exemption u/s. 54F would be available.

The exemption would be available on the entire investment amount and not only on the outstanding loan amount.

I hope this answer satisfies your requirements. 

Regards,

CA Hunny Badlani

Dear sir,

1.The LTCG from sale of unlisted shares shall be taxable at 20%, plus 4% health and education cess.

2.With effect from 1 April 2018, LTCG arising on the sale of listed shares in India that are held for more than 12 months before sale, are taxable

Dear sir,

Possible ways:-