Mr.X has a 18 year old residential apartment in Hyderabad and a residential plot in Bangalore. He has sold his Hyderabad apartment in Nov 2015 for Rs.25 lacs, on which he did not get any capital gain. Then with the proceeds of sale of old apartment and adding Rs.45 lacs from his savings, he wants to purchase a new apartment in Bangalore in January 2016. Thereafter, before Nov 2016 (i.e., within one year from date of selling his Hyderabad Apartments), he wants to sell his residential plot in Bangalore for Rs.80 lacs on which he gets a capital gain of Rs.60 lacs.
In that position, will Mr.X has to pay Capital Gains tax on entire Rs.60 lacs, or, whether he can reduce the Rs.45 lacs (which he has additionally put for purchasing new apartment) from Rs.60 lacs and show net capital gains as Rs.15 lacs and pay capital gains on such reduced amount.
I would be grateful if I am clarified on the matter.
CAclubindia
