KJS (NA) (102 Points)
17 March 2018A flat bought in 1981 was sold in 2018.
Can the LTCG be invested in the following manner to get "complete" capital gains exemption?
1. Purchase of a new flat with 75% of the sum received
2. Purchase of capital gains bonds with 25% of the sum received
Secondly, is this investment to be made before Mar31,2018 or before the return filing date to claim exemption in AY2018-19?
abhilash
(student)
(411 Points)
Replied 17 March 2018
YES YOU CAN GET COMPLETE CAPITAL GAIN EXEMPTION
TIME PERIOD :The new property can be purchased either 1 year before the sale or 2 years after the sale of the property. The gains can also be invested in the construction of a property, but construction must be completed within three years from the date of sale.
Finding a suitable seller, arranging the requisite funds and getting the paperwork in place for a new property is one time consuming process. Fortunately, the Income Tax Department agrees with these limitations.
If capital gains have not been invested until the date of filing of return (usually 31st July) of the financial year in which the property is sold, the gains can be deposited in a PSU bank or other banks as per the Capital Gains Account Scheme, 1988. This deposit can then be claimed as an exemption from capital gains, and no tax has to be paid on it. However, if the money is not invested, the deposit shall be treated as short term capital gains in the year in which the specified period lapses.
BONDS:
RAMAKRISHNAN R
(INCOME TAX OFFICER)
(1736 Points)
Replied 18 March 2018
KJS
(NA)
(102 Points)
Replied 18 March 2018
Thanks for responding.
I am reminding to re-confirm ..... I am proposing to buy a flat lower in value than the capital gains accrued and investing only the difference in capital gains bonds within the 6 months' time frame mentioned above.
Am I in a straight line with the IT Act and Rules?
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