Long term capital gain

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SOMASHEKAR (Querist)
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13 May 2019 I have a case where in Mr. Suresh had purchased a residential plot in 1985 for 1 lakh, he has constructed house in the year 2006 investing 20 lakhs, now due to some reasons he has sold his residential house for 75 lakhs in may 2019.
1. How can Mr.Suresh invest this amount to avoid tax or to avail exemption under LTCG.
2. Mr.Suresh has two sons, can he gift that amount to them ? will tax be applicable to their sons ?
3. Can Mr. Suresh purchase 2 residential plots ( 1 in his name and 1 in his wife’s name) for that amount in which house will be constructed in both the plots. will he be attracted to the tax under capital gain.
4. If Mr. Suresh wants to give this amount to his Wife and 2 Son’s what would be the best way and how should he invest. So that there will be no tax under capital gain.

Pls suggest.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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13 May 2019 1 Construct or buy two houses in your name and gift it to your two sons no tax payable.
Exemption under section 54 can be claimed in respect of capital gains arising on transfer of capital asset, being long-term residential house property. With effect from Assessment Year 2020-21, a taxpayer has an option to make investment in two residential house properties in India to claim section 54 exemption.
2 No tax payable by sons but you have to pay capital gains tax.
3 Purchase two plots in your name and construct two houses no tax payable.
4 Go as per reply given above. You can give cash(through bank) to your wife out of indexed cost only capital gains to be invested.

SOMASHEKAR

SOMASHEKAR (Querist)
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13 May 2019 With effect from Assessment Year 2020-21, a taxpayer has an option to make investment in two residential house properties in India to claim section 54 exemption. Since Mr.Suresh has sold the property in MAY 2019..
1. Can Mr. Suresh avail this exemption if he construct or buy two houses this year (2019).
2. Can he gift the newly constructed house/ purchased house immediately or there is a time limit for gifting.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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13 May 2019 1 Yes, he can avail the exemption, for financial year 2019-20 Assessment Year is 2020-21
2 Gift it after 3 years.

SOMASHEKAR

SOMASHEKAR (Querist)
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13 May 2019 Thank you very much Sir...

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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13 May 2019 welcome................................

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