Availing Capital gain exemption while purchasing new flat

1. Capital Gain Exemption for Multiple Properties: You can claim capital gain exemption for both the plot and flat if you fulfill the conditions specified under Section 54 and Section 54F of the Income Tax Act, respectively. The exemptions are available when you invest the sale proceeds in a new residential property. The timelines and conditions mentioned earlier apply to each property individually.

2. Investment in NHAI Bonds: As of now, investment in NHAI bonds does not qualify for tax exemption under Section 54 or Section 54F. The eligible investments for tax exemption are specified under Section 80C of the Income Tax Act, such as PPF, NSC, ELSS, etc.

3. Applicability of Exemption to Plot and Flat: The capital gain exemption can be claimed for both the plot and the flat, provided you meet the respective conditions mentioned earlier. The type of property being sold (residential or non-residential) determines the applicable section for exemption.

4. Transaction of Purchase of New Property: To claim tax exemption, the purchase of the new property should be completed within the specified timelines mentioned earlier. The exemption is based on reinvesting the sale proceeds in a new property. Ensure that you have proper documentation and registration of the new property to establish the transaction's validity.

To learn more about ITR 2 - Capital Gain Tax on Sale of Land & Building click here
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