Can Capital Gains be reinvested to purchase Plot?

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  1. Beulah

    Beulah New Member

    I have acquired a land from my Dad in the year 2004 as a gift value Rs. 2,00,000/- on which I constructed a house costing Rs. 25,00,000/- in the year 2013. I have sold the same property - ( paper value - Rs. 50,00,00/-) in 2014. I have purchased a plot for construction of house costing Rs. 48,00,000/- ( paper value) in 2014.
    Should I pay tax. What is the procedure that I should follow now. I am planning to construct house in the next few years after arranging for the finance. I do not have any gain to deposit in the Capital gain account.
    Is it okay to just show that I have purchased a land to construct house OR is it compulsory to construct house in 3 years. Your advice and suggestions anticipated
    Last edited: Nov 25, 2014
  2. Amit Sahni

    Amit Sahni Active Member

    As you have reinvested the Capital Gains in purchasing a plot and intent to construct a house on this plot - i think capital gains exemption would be allowed.

    Moreover, you have already reinvested amount which is more than the capital gains arising in your case... Therefore, I think the exemption would be allowed..

    Not sure on this but I think the exemption would be allowed.
  3. Beulah

    Beulah New Member

    Dear Sir,

    Thanks for the response. some corrections in the enquiry made.

    Land gifted by Dad in the year 2000 worth Rs. 3,00,000/-
    constructed house in 2013 (availing Bank Loan - Rs. 19,60,000/-) Cost of construction Rs. 25,00,000/-
    Sold House in 2014 for Rs. 48,00,000/-
    Puchased new plot in 2014 for Rs. 28,80,000/ Regn exp - 2,00,000/- Brokerage - Rs. 1,00,000/-
    Cleared home loan of Rs. 18,40,000/-

    Am I eligible for Tax on capital gain.
    Is it compulsory to construct house in 3 years.
    Last edited: Nov 25, 2014
  4. Beulah

    Beulah New Member

    Can I have somebody respond to my query
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