23 November 2015
I have sold recently my residential plots. From the proceeds, will I be permitted to purchase agricultural land to carry out agricultural activity, with out being taxed on the capital gains? Please advise
23 November 2015
If sale proceeds of residential plot is invested in agrl.land, no exemption / deduction is allowable from capital gains tax of the former.
23 November 2015
Thank you sir. I would like to get further some clarification. If my capital gain amount on selling the residential plots is say 1 crore and if I invest 40 Lakhs on buying the agricultural land, then I will be paying capital gains tax of 20 % on the amount 40 Lakhs? Is that so sir. Please advise
23 November 2015
Thank you again for the clarification sir. It follows that in the example cited by me, if I pay 20% tax on the capital gains of 1 crore, then the balance amount can be used for any kind f investment, that is in agricultural land, residential plots, flats, fixed deposits etc. is this correct sir? The other question is payment of tax on the capital gains, is there any time frame or I could pay in the next two financial years without any fine?
25 November 2015
1. If you opt to pay capital gains tax ,the balance amount can be used as you like say deposit in bank, investment in land and so on and the income generated in future ( eg., interest on such bank deposit ) will be liable to income tax.
2. There is a time frame, can be paid in advance in three installments viz., in sept, Dec and March or while filing the return. If advance tax is not paid or return is filed belatedly interest on income tax has also to be paid mandatorily.
CAclubindia
