Long term Capital Gains Tax Query

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  1. Ankit G

    Ankit G New Member

    I have a plot which i had bought in 2007. It is a joint property with my wife. I had built a house in this plot and received the completion certificate in 2011.

    Now, I have a couple of queries - with the change in LTCG rules in the last budget. Now want to sell the property (considering i have completed 3 years). If the land was 50lakh and cost of construction was 25 lakh. (We can ignore the indexation benefits in the example for simplicity).

    And i am getting an offer of 1.5 cr. So, if i sell the proceeds and invest it into a new property costing 75 lakhs will i need to pay any tax on the remaining amount? Can I use the remaining 75 lakhs in my business? Do I need to keep the entire 1.5 cr in the Long term capital gains account (with PSU Bank) till I buy the new property or i need to keep only the gains part in it?

    My second query - If i buy 2 flats of 75 lakhs each (75 gains and 75 original sum invested) will there be any tax implications?
  2. rudrabose

    rudrabose Active Member

    1. To claim exemption under Section 54 - you only have to re-invest the profits and not the capital gains. You can either re-invest this profit in another property or deposit it in the capital gains account scheme till the time you search for the property.

    After investing the profit, the balance amount can be used by you for any purpose like Business use, Self use etc.

    2. The Budget 2014 has brought in an amendment which says that if a property has been sold, then capital gains arising from such sale should be reinvested in a single house only and not in multiple houses.
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