Capital Gains from Sale of Residential Property (slightly complex)

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    GURU DATTA V New Member

    1. In anticipation of house sale we started purchase of a new apartment because we got a good deal.
    2. We put in nearly 9 lakhs of our own savings into purchase of this new apartment to begin with - sale had not gone through yet.
    3. Then, sale of house was concluded and we utilized ( this far ) about 40 lakhs to complete paying for apartment from capital gains of sale of house.
    4. Now Registration is coming up and we will spend about 5-6 lahs from capital gains for the same.
    5. We had more capital gains and so we invested a substantial amount in bonds to the tune of nearly 50 lakhs in REC to save taxes.
    6. All of this happened in 2015-16.

    My questions are as follows :

    a) How is the 9 lakhs spent from the savings to be treated for filing our tax returns ?
    b) The entire capital gains amount spent for purchase of new house is tax exempt right ? If not please advise. ( Section 54 ?)
    c) Capital gains money is being spent for registration of new house. This is tax exempt too right ?
    d) The balance of capital gains returns which were invested in Capital gains bonds for 3 years is ALSO tax exempt right ? ( Section 54-EC ?)

    Any other observations of our scenario - Please advise.

    Thank You very much for reading this post and also for responding to the same.

    Guru Datta V
  2. rudrabose

    rudrabose Active Member

    1. No Treatment of Rs. 9 Lkahs invested from own pocket
    2. The amount reinvested can be claimed as an exemption
    3. Stamp Duty paid on purchase of house can be claimed as a deduction under Section 80C
    4. Yes, the amount invested in Bonds is also exempted
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