Capital gain tax clarification

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

12 March 2013 Sir, I sold one acre ancestral agricultural land which was within 8 km of M.C area for consideration of Rs.6.5 Crore in July 2012. Out of which I purchased Agricultural land of Rs. 2 crore and two house of Rs 1.50 crore i/c stamp duty.
1.How much amount now I have to invest in buying property to avoid long term capital gain tax .
2. Whether I can invest in only agricutural land or I can also invest in buying house or plot also.
3. Is it compulsory to deposit the balance amounts in Capital gain account before 31 March if I not purchase property before 31 March. What loss I have to bear If I donot do so.
Please guide me as I am laymen in the rules of Capital gain Tax.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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13 March 2013 you may claim exemption under 54B, you are supposed to reinvest only the capital gains into new agricultural land.

However, if you wish to purchase other residential property, you may claim exemption under Section 54F. However, in this case, you shall have to invest the whole proceeds of the sale instead of just capital gains.

In case you are unable to utilize the sale proceeds in any of the above manner, you may deposit the same in Capital gains accounting scheme before the due date for filing of tax return under Section 139(1) ie to say that if you are supposed to file return by 31 July, then you shall have time upto 31 July to deposit money under Capital gains account scheme.

Querist : Anonymous

Querist : Anonymous (Querist)

13 March 2013 Thank you NIKHIL Ji from the depth of my heart,
The property which I sold was purchased by my Grandfather in about year 1948 which I become owner of the same in 2005 through release deed executed by my father. I sale this in Rs. 6.5 Crore. Please tell me how much capital gain I earned so that the same may be reinvested in agricultural land to avoid tax.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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14 March 2013 check the cost/ valuation of land as on 1 April 1981. If I am not mistaken, that should be the cost of land. I can't comment further without actually looking at papers.

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