• Investment of long term cap gains

Hello Payal:- My query relates to long term Cap gains on sale of property under section 54 of the Income Tax Act. I sold residential property ( sale deed registered on 11th January 2021). Thereafter the long term cap gains of Rs 67 Lakhs were invested in special capital gains savings account of BANK OF BARODA on 26th Nov 2021. The query is :- If I am buying residential Flat from a builder ( CC received recently) WHAT IS THE DEADLINE & SHOULD THE ENTIRE AMOUNT OF RS 67 LAKHS BE INVESTED ?
Asked 1 month ago in Capital Gains Tax

It seems property was sold in FY 2020-21 (i.e. AY 2021-22). Due date to deposit amount in capital gain account was 31.07.2021 (i.e. due date of filing of ITR for AY 2021-22) to claim exemption u/s 54. Time limit for purchase is 2 years from the date of transfer. Entire amount of LTCG of Rs. 67 lacs should be utilized to claim exemption.

 

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Vivek Kumar Arora
CA, Delhi
4556 Answers
681 Consultations

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Dear Sir,

 

Hope you are doing well !!

 

The deadline is 2 years from the date of transfer.

 

To claim full exemption, the entire capital gain amount has to be invested.

Payal Chhajed
CA, Mumbai
5179 Answers
254 Consultations

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If you wish to get entire capital gain exempt then you should invest entire capital gain amount i.e. 67 lakh.

 

If you wish to purchase the house your deadline is 2 years from date of sale i.e. 11.01.2023. If you wish to construct the house you will get 3 years i.e. 11.01.2024.

 

Do remember not to leave any amount in CGAS as it will be very difficult to take out that money.

 

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

Thank you.

Naman Maloo
CA, Jaipur
4108 Answers
76 Consultations

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As per circular no. 12 of 2021, last date for deposit in CGAS was 30.09.2021. Now you can take the benefit of circular no. 1 of 2023 but purchase the property before 11.01.2023. If you opt for construction, it should get completed before 11.01.2024.

 

For detailed discussion you may opt for phone consultation

Vivek Kumar Arora
CA, Delhi
4556 Answers
681 Consultations

5.0 on 5.0

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