for example...
if I have a house property in city A which can be sold out at 50 lakhs...
I want to purchase new property in city B which is costly city...
now , I started investing in FD to purchase new house property in city B so that I can get good property from sale of hp in city A of rs 50 lakhs as well as from FD amount rs 35 lakhs.
what is the capital gain tax benefit??
can I purchase a small property from FD of rs 35 lakhs and purchase other property from hp valued rs 50 lakhs when it will be sold??
Yes. you can.
ideally, capital gain benefit will come only if you sell one property and buy another one property. the new property has to be purchased one year before or 2 years after the sale of old property. So the dates are of utmost importance. In case you decide to sell first and buy later, you need to deposit the capital gain amount into capital gain scheme account so as to not pay tax untill 2 years and claim capital gain exemption.
CAclubindia
