Sale of residential building

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

28 December 2013 Dear All,

I have sold my residential building for Rs.60/- lakhs on 31st Aug-2013 which was constructed 5 years back and now I have taken plot in other area for Rs.20 lakhs and started construction of resident building. It will be completed by May-2013. the approx value of construction is Rs.25/- lakhs. In which way I have to invest the amount to save the income tax and How the tax will be calculated.? Please give me some guidance.
Thank you.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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28 December 2013 dear Friend,

The amount invested in Rs 45 lakhs. you need to check the capital gains earned on the sale of residential building. If the amount so earned as capital gains is more than 45 lakhs, then the difference between such amount exceeding Rs 45 lakhs shall be taxable as long term capital gains at 20%. If the said capital gains are less than 45 lakhs, then no tax liability shall arise.

Querist : Anonymous

Querist : Anonymous (Querist)

28 December 2013 Nikhil sir, i had constructed the house for 18 lakhs before 5 years back and plot was purchased 10 years back for 3 lakhs.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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28 December 2013 dear friend,

then most probably, you dont have to worry at all. more or less, there should not be any tax liability. Your capital gains should be around 28 lakhs.

Since you are investing more than this amount, no tax liability should arise under section 54 (provided all the conditions provided therein are complied with)

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