Tax on Sale of LAND & further Investment of the Money in Stocks

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This discussion clarifies the tax implications of selling land and investing the proceeds in stocks. It explains that capital gains tax applies to the profit made from the land sale, with a 20% rate on plots held for over two years. The remaining capital gain, after tax, can be invested in the stock market. The user is advised to file their Income Tax Return (ITR) and pay the applicable tax before the deadline.

gk (Querist)

05 August 2021 Dear Peers, Pranam!

Regarding a Property (Land) Sale in Coimbatore District.

In the last year (October 2020) I have been sold a land and gained (with ref. to the value recorded on the deeds) more than fifteen lakhs rupees. I have not been bought any other land/property with that amount But invested part of the amount for buying of stocks/shares. It has been told by one of my friends that I coan not invest this money in stock market and I should have property gain tax to be paid to the ITD in this financial year. Please let me know how much amount I should paid (or the percentage of gain as tax) and whether I have any issues for investing that amount in stock market as I mentioned above.

Please guide me if I have been misguided on this regard.

Thanking you,

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

05 August 2021 Is it a plot or rural agricultural land.
Is it held for more than 2 years.
20% tax payable on capital gains in case of plot held for more than 2 years.
Balance 80% of capital gains and cost of the sale value you can invest in stock market.

gk (Querist)

06 August 2021 Thank you Sir for the clarifications,
its a plot and bought in 2008/2009. So the tax is 20% of fifteen lakhs, means rupees three lakhs to be paid. It should be paid this financial year i.e. 2021-22 soon or whether I could pay before 31st March 2022 ?
Thank you Sir once again,
gk

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

06 August 2021 20% tax payable on 15 lacs minus indexed cost of acquisition. File ITR before September 2021 and pay taxes.

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