28 December 2014
In september 2014 I have incurred a long term capital gain of Rs.2000000 after selling my residential house.
1) I want to buy a plot and then build a house on it. Can I utilize the capital gain amount to do both ie. to buy the plot as well as build the house and claim exemption on LTCG?
2) I have deposited the entire sales consideration in my savings account with SBI. I then opened FDs from the entire amount. However, I have another Rs.2000000 in another bank, which is not related to this sale. Can I utilize this amount to build the house and save LTCG? I mean, do I have use the same money I received from the sale to save LTCG or can I use an equivalent amount from another bank?
28 December 2014
1. Yes, cost of plot and construction cost both are eligible for claiming exemption.
2. The stipulation is as regards the amount of capital gains and not as regards the same money. So, you will be eligible for exemption if you invest Rs 2000000/-. There is no condition like the "same money". .
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