Sale of res. house & buying of comm. property

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MOIN UDDIN (Querist)
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02 February 2020 I had sold my residential house, from the sale consideration received i want to purchase a commercial property . How much tax will be charged & at what rate? Is any exemption available under I.T. Act

Ca Neha Jain

Ca Neha Jain (Expert)
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02 February 2020 The entire gain from sale of your residential property can be used to purchase another property to avoid tax. If residential property has been held by you for more than 3 years, long term capital gain will be applicable and indexation benefit will be received. Tax amount n rate will depend upon the nature of your residential property.
. There is no tax to be paid if you use the entire gain from the transaction to buy another house within two years or construct one within three years. The two- and three-year period applies even if you bought another house a year before selling the first one. But the property should have been bought in the name of the seller.

In case the entire capital gains are not invested, the balance amount is charged to longterm capital gains tax.