Tax implication on sale of land and repurchase of land

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

02 April 2013 Dear Learned Members,

I request your advise on the following.

I am planning to sell my residential vacant Plot in Chennai and found out a buyer. This land was bought by me in the year 2004 with my earned income.

I would like to re-invest the above sale proceeds in purchase of lands/plots.

I want to know what is the capital gain tax implications in this sale and subsequent purchase.

Sumit Grover

Sumit Grover (Expert)
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02 April 2013 The same shall be taxed as long term capital gains & no exemption shall be given(apart from basic exmeption limit of Rs. 200,000) for the new plot purchased.

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Querist : Anonymous

Querist : Anonymous (Querist)

02 April 2013 Thank you sir,

But, can you explain in detail..

what will happen if i Invest a part of the amount for purchasing a flat and the balance in purchasing vacant residence land. H

Sumit Grover

Sumit Grover (Expert)
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02 April 2013 In that case, you shall be entitled to get exemption specified u/s 54F for the net amount invested in the flat(assumin it will be a residential property) and the balance amount shall be taxed.....the following is the link for section 54F.
https://law.incometaxindia.gov.in/DIT/File_opener.aspx?page=ITAC&schT=&csId=27cf9ead-18bb-477f-9a4d-c38ab73e2bda&rdb=sec&yr=a56ea192-3ca8-433a-a515-ed68a062eac7&sec=54F&sch=&title=Taxmann%20-%20Direct%20Tax%20Laws

Moreover,adding to the previous reply, if you purchase a plot today & ensure that you shall construct a residential house property thereon within 3 years from the date of transfer, then also you can claim exemption...If, for any reason, you are unable to construct the flat thereon, then the amount claimed as exemption earlier, shall be taxed in the year in which the duration of three years get expired.

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