• Sale of property and purchase of another property from sale proceeds

If one disposes off landed property and purchases land elsewhere for the same amount, does one
have to pay income tax on it ? ( does it come under Capital gains ? )
Asked 9 months ago in Income Tax from Kozhikode, Kerala

What kind of land will you be purchasing? Will it be an agricultural land?
Lakshita Bhandari
CA, Mumbai
2017 Answers
63 Consultations

5.0 on 5.0

Dear sir/mam
it comes under purview of Capital gains but you can claim exemption to some extent under 54F of IT,act 1961
Shiv Kumar Agarwal
CA, Delhi
273 Answers
60 Consultations

5.0 on 5.0

Yes, he has to pay capital gain tax.

However, if he purchases another house property, instead of land, then his capital gain tax may get exempt subject to other conditions being satisfied.

Please feel free to call/ revert in case you need more clarity.

Thanks and regards
Abhishek Dugar
Abhishek Dugar
CA, Mumbai
3456 Answers
156 Consultations

5.0 on 5.0


Yes, you will have to pay tax on it. You can claim deduction by either (1) buying a residential property, or (2) investing in capital gain bonds. You cannot claim deduction by buying a land.

Keerthiga Padmanabhan
M.Com., CA, LL.B
Keerthiga Padmanabhan
CA, Greater Mumbai
784 Answers
23 Consultations

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Yes, you are very much correct. But there is a timeline to do this transaction.

You have to buy a land within 2 year from the date of sale of your old land but you cannot keep the money with you. You will have to open a Capital Gain Tax Saving Account before the due date of filing of returns and deposit the money there till the time you buy a property.

Trust this clarifies your query. 

Feel free to call / get back in case of further clarifications. 

Thanking You. 

Rohit R Sharma
Rohit R Sharma
CA, Mumbai
2104 Answers
91 Consultations

5.0 on 5.0

You will not get any exemption of capital gains, if you purchase another land out of the sale proceeds of a land. However, you will get exemption u/s 54F if you purchase a residential property subject to fulfilment of conditions as applicable. You can also get exemption if you invest in Capital Gains bonds u/s 54EC upto Rs 50 Lakhs and another Rs 50 Lakhs if you invest in eligible units u/s 54EE. Most importantly, these exemptions will be available only if the gains are in the nature of long term capital gains.
B Vijaya Kumar
CA, Hyderabad
857 Answers
55 Consultations

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