Hello Bretheren,
I have recently sold (apr.07) a flat at mumbai generating a Capital gain of Rs.20 lakhs, please suggest me the most prudent investment strategy u/s 54 assuming ,
1) I cannot afford to block more than the Capital Gains amount.
2) I am ready to block my entire sales consideration.
Please tell me the exact practical procedure to be followed .
Regards
Prince George
If the flat you sold was owned by you for 36 months or more, Two options available to you are:
1). Claim exemption u/s 54, if you have purchased another residential house within last 1 year (i.e. April 06 onwards) or invest capital gain in purchase/ construction of new residential house.
You can deposit the capital gain for next 2/ 3 years with the purpose of buying/ constructing the house.
2) Invest the money to the extent of capital gain in Rural Electrification Corpn. bonds or NABARD Bonds within 6 months (Oct,07) and claim deduction U/s 54 EC.
Thanks & Regards,
Ashish
CAclubindia
