Do I have to reinvest entire Capital Gain or only Sale Proceeds?

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  1. RAM VISWANATHAN

    RAM VISWANATHAN New Member

    My wife and I, both NRIs sold a property in July 2014. As per the regulations 20% of the amount as tax was withheld by the buyer and Form 16A has been issued to us.

    The captial gain on this property is estimated at Rs.20 Lakhs. We invested this Rs.20 Lakhs in another property as a part payment. This new property will be registered only in Dec 2015- Mar 16.

    Question:

    1. To get get capital gain exemption, do I have to invest the whole sale proceed or only the capital gain in the new property?

    2. Can I show the proof of receipts as the investment in this property and get the exemption as the property registration will not be available by then.

    Thanks and Regards
     
  2. rudrabose

    rudrabose Active Member

    1. If the property sold by you was a Residential Property - you are only required to reinvest the Capital Gains. If the property sold by you was not a Residential Property - then you are required to reinvest the whole sale proceeds.
    2. Yes, you can show the proof of investments to claim exemption if the property has not been registered.
     
  3. RAM VISWANATHAN

    RAM VISWANATHAN New Member

    Thanks for the reply. It is residential property.

    Just clarifying.

    Property sale consideration: 40 lakhs

    Tax with held at source by seller (@20% of sale): 8 lakhs

    Capital gain: 27 lakhs, which is invested in another property.

    Cash balance out of sale: Rs.5 Lakhs


    After I get the CG expemption, while filing the returns, will I be paying any other income tax.

    Please note I do not have any other source of income in India
    Best Regards
    Ram
     
  4. krishnamurthy

    krishnamurthy New Member

    What is the acquisition cost after indexation?
    It is LTCG or STCG?
     
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