Capital gain from sale of house property

223 views 9 replies

chaitri kharod

115 Points Joined February 2021

for example...

if I have a house property in city A which can be sold out at 50 lakhs...
I want to purchase new property in city B which is costly city...

now , I started investing in FD to purchase new house property in city B so that I can get good property from sale of hp in city A of rs 50 lakhs as well as from FD amount rs 35 lakhs.

what is the capital gain tax benefit??

can I purchase a small property from FD of rs 35 lakhs and purchase other property from hp valued rs 50 lakhs when it will be sold??

Replies (9)

CA Raj Doshi

Practising CA

8944 Points Joined December 2013

Yes. you can.

ideally, capital gain benefit will come only if you sell one property and buy another one property. the new property has to be purchased one year before or 2 years after the sale of old property. So the dates are of utmost importance. In case you decide to sell first and buy later, you need to deposit the capital gain amount into capital gain scheme account so as to not pay tax untill 2 years and claim capital gain exemption.

chaitri kharod

115 Points Joined February 2021

Thank you so much sir...

sabyasachi mukherjee

27910 Points Joined May 2017

Capital gain from sale of house property.

Musrath Shaik

175 Points Joined July 2023

Tax laws can be complex and subject to change. It's essential to consult with a qualified tax professional or financial advisor to get accurate and up-to-date information tailored to your specific situation.

In India, when you sell a house property (HP), the profit you make is subject to capital gains tax. There are two types of capital gains:

Short-Term Capital Gains (STCG): If you sell the property within two years of acquiring it, any profit is considered short-term capital gains.
Long-Term Capital Gains (LTCG): If you sell the property after holding it for more than two years, any profit is considered long-term capital gains.

For further more detailed information on this topic visit: ITR 2 - Capital Gain Tax on Sale of Land & Building

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sabyasachi mukherjee

27910 Points Joined May 2017

I hope the discussion is not exhaustive.

chaitri kharod

115 Points Joined February 2021

Thanks to all for helping me..

CA Aman Rajput

Chartered Accountant

10505 Points Joined July 2023

Yes, you can purchase two properties in different cities using the proceeds from the sale of your house property in city A and the amount invested in FD. The capital gain tax benefit would be applicable to the entire sale proceeds of Rs 50 lakhs, even though you are using only a portion of it to purchase a property in city B. The remaining amount of Rs 15 lakhs can be used for any other purpose without any tax implications.

chaitri kharod

115 Points Joined February 2021

Thank you so much all

Musrath Shaik

175 Points Joined July 2023

In this situation, where you've received a short deduction notice for TDS, and there's a delay in the correction request being resolved, it's essential to take specific steps to address the issue. Here are some general guidelines:

Communication with Tax Authorities:
- Consider reaching out to the income tax department through their official channels for clarification on the status of your correction request.
- You may contact the Assessing Officer or the concerned jurisdictional officer to explain the situation and provide any additional information they may require.
Documentary Evidence:
- Ensure that you have proper documentation to support your case. This may include proof of the TDS deposit, evidence of the correction request submission, and any communication with the tax authorities.
  For further more detailed information on this topic visit: TDS TRACES by Income Tax Department.
  
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