Saving Capital gain on Sale of property

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A property owner sold a property in FY 2020-21, realising a capital gain of Rs. 40 lacs. Instead of investing the proceeds, they used the money to repay a loan on another property. Now, having received a notice for filing an updated return, they are seeking ways to save long-term capital gains tax. The initial advice suggests filing an updated return and paying the applicable taxes.

DIVYESH JAIN

DIVYESH JAIN (Querist)
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19 June 2023 Dear Sir,

If a person sold a property in the financial year 2020-21 which was in his name and had a capital gain of Rs. 40 lacs which he didn't invest it anywhere till date but rather used the sale proceeds to repay a loan of another property which was in his name. The loan was taken in the year 2016.

He didn't file his Income tax return for F.Y 2020-21 and has now got notice for filing updated return. Is there any way now he can save the long term capital gain tax on sale of property and file updated return.

Please suggest if there is any solution.

Regards,
Divyesh Jain