Long term capital gain tax

Hi Rajesh,

As period of holding is 20 years, it has to be LTCG.

Section 54 of IT act specifies that :

• Asset that needs to be acquired should be a residential house property

ANother thing to note is the time limit which is as below:

In case of Purchase :1 year before or 2 years after sale

In case of Construction: 3 years  after date of sale

 

Hope this helps!

Hi Rahul ,

  Thanks for the reply .

  what is residential house propert . A non agriculture land comes under Residential house property .

Thanks

Rajesh

Dear Rajesh 

1.In your case LTCG will be applicable and to exempt the same under Section 54F you have to invest the same in purchase any New house property. 

2. If you invest the same in already constructed house property the benefit will not available. But as per recent case law if you demolish the old structure and do the construction again the benefit can be taken on the same. 

 

3. Land does not comes under residential house property. 

 

Regards 

 

Guys a quick question: I own an apt in which I reside. I purchased a plot and constructing a house with my savings. I sold an empty plot owned by my mother because of which I need to invest 70 lacs appropriatly to save 20% tax. Can my mother buy my apt I am living in for 70 lacs. What ever little LTCG I incurr can be offset against house I am constructing. This I will loose only around 5% as stamp duty instead of 20%. I can later return 70 lacs to my mother as it does not attract gift tax. Is this possible? If possible, it is like allowing section 54f for investment made in sons name, ofcourse at the loss of stamp duty. Am I missing something?