Nyk (NA) (22 Points)
04 July 2022Hello
I am selling my house which will lead to a capital gain.
I live in a standalone house. I plan to use the capital gains from the house sell to build another floor on top of my current house.
Can I do this without paying taxes on the capital gain?
Is this considered same as reinvesting the amount in another property within 2 yrs timeframe to save on the capital gain tax?
Thanks.
Rama chary Rachakonda
(Master in Accounts & Lawyer email ID:ramachary64@gmail.com voice no:9989324294)
(5235 Points)
Replied 04 July 2022
The long-term capital gain on the sale of property is exempted if the proceeds are invested in the purchase or construction of a house. The purchase of property can happen a year before the sale of the property in question or two years after its sale. Alternatively, one can invest in infrastructure bonds notified by the government. But one has to be mindful of the fact that these investments have a lock-in period.
CA Puja Sharma
(Chartered Accountant)
(5010 Points)
Replied 04 July 2022
Yes, the investment can be used to construct the new floor of the property. Please use the 2nd floor as a separate house.
Mahesh Shah
(2308 Points)
Replied 04 July 2022
CA Rashmi Gandhi
(Chartered Accountant)
(86323 Points)
Replied 04 July 2022
CAclubindia
