Exemption u/s 54F is available only if you are constructing a residential house. If you dont construct residential house within 3 years of transfer then whole amount of capital gains would be brought to tax at the end of 3rd year.
Can Capital Gain amount used to buy a vacant land?
I am a NRI, A family property (vacant land) was sold and I have got my share. Can I invest the amount in vacant land (plot) to avail tax exemption? Do I have to build a house within 3 years in that plot? Can I not keep this plot as investment or use it to build a house after 5 years?
Asked 8 years ago in Capital Gains Tax
As per our view you cannot invest in vacant plot to save capital gains Tax. You need to purchase the plot and then use the capital gains amount for investment in construction of house.
You cannot get exemption if the house is not constructed within 3 years.
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