Short term capital gain tax on property purchase
This query is : Resolved
10 March 2016
Sir/Madam,
Please suggest me for the Capital Gain arising from following transaction :-
Mr. Ganesh bought a property (Flat) for Rs. 11,00,000 (Including registration) on Jan-2014. He has sold this property for Rs. 16,00,000 on Mar-2016 (less than three years) and there arise a Short Term Capital Gain of Rs. 5,00,000.
Query:- 1) Is there any option to save the tax on this value received (Rs. 16 Lakh) like reinvesting the same value for purchase of another Capital Asset.
2) He is planning to buy NA Land worth Rs. 9,00,000 from the sale proceeds, will it help him in tax benefit.
Regards,
Please suggest me for the Capital Gain arising from following transaction :-
Mr. Ganesh bought a property (Flat) for Rs. 11,00,000 (Including registration) on Jan-2014. He has sold this property for Rs. 16,00,000 on Mar-2016 (less than three years) and there arise a Short Term Capital Gain of Rs. 5,00,000.
Query:- 1) Is there any option to save the tax on this value received (Rs. 16 Lakh) like reinvesting the same value for purchase of another Capital Asset.
2) He is planning to buy NA Land worth Rs. 9,00,000 from the sale proceeds, will it help him in tax benefit.
Regards,
10 March 2016
https://www.charteredclub.com/section-54/
check this only for long term capital assets transferred u can get n not for short term assets
check this only for long term capital assets transferred u can get n not for short term assets
10 March 2016
Sir, my query is for STCG and not for LTCG.
10 March 2016
Thats wat i told u ...its available only for ltcg and not for stcg
10 March 2016
ok sir.....is there any option to save the tax in the case of STCG if we re-invest the sale proceeds or part of sale proceeds in any other Capital Assets ?????
25 July 2025
For **Short Term Capital Gain (STCG) on property**, here’s the key point:
---
### Can you save tax on Short Term Capital Gain by reinvesting sale proceeds?
* **No, there is no exemption or deduction available under the Income Tax Act for Short Term Capital Gains by reinvesting in another capital asset.**
* Sections like **Section 54**, **54F**, or **54EC** provide exemptions but **only for Long Term Capital Gains (LTCG)** on sale of certain assets.
* STCG is treated as normal income and **taxed at your applicable slab rate**.
* Reinvestment of sale proceeds in another property or capital asset **does not provide any tax relief on STCG**.
---
### Regarding your specific question:
1. **Reinvestment of entire sale proceeds (Rs. 16 Lakh) for buying another asset — No tax exemption for STCG.**
2. **Buying Non-Agricultural (NA) land for Rs. 9 Lakh — this also does not help save tax on STCG.**
---
### Summary
| Situation | Tax Benefit Available? |
| ---------------------------------------- | ---------------------- |
| Reinvesting STCG in any asset | No |
| Reinvesting LTCG in residential property | Yes (Section 54) |
| Reinvesting LTCG in other capital assets | Possibly (Section 54F) |
---
If you want to reduce tax liability on STCG, you may consider other tax planning measures, but reinvestment itself does not offer exemption.
---
**Do you want me to help calculate tax on the STCG or suggest other ways to manage tax?**
---
### Can you save tax on Short Term Capital Gain by reinvesting sale proceeds?
* **No, there is no exemption or deduction available under the Income Tax Act for Short Term Capital Gains by reinvesting in another capital asset.**
* Sections like **Section 54**, **54F**, or **54EC** provide exemptions but **only for Long Term Capital Gains (LTCG)** on sale of certain assets.
* STCG is treated as normal income and **taxed at your applicable slab rate**.
* Reinvestment of sale proceeds in another property or capital asset **does not provide any tax relief on STCG**.
---
### Regarding your specific question:
1. **Reinvestment of entire sale proceeds (Rs. 16 Lakh) for buying another asset — No tax exemption for STCG.**
2. **Buying Non-Agricultural (NA) land for Rs. 9 Lakh — this also does not help save tax on STCG.**
---
### Summary
| Situation | Tax Benefit Available? |
| ---------------------------------------- | ---------------------- |
| Reinvesting STCG in any asset | No |
| Reinvesting LTCG in residential property | Yes (Section 54) |
| Reinvesting LTCG in other capital assets | Possibly (Section 54F) |
---
If you want to reduce tax liability on STCG, you may consider other tax planning measures, but reinvestment itself does not offer exemption.
---
**Do you want me to help calculate tax on the STCG or suggest other ways to manage tax?**
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