Capital gain from sale of plot/site and reinvest options

it is a case of short term capital gain... thus you are not eligible for any exemption... tax will be payable at normal rates on slab basis...

Thanks for your response ,I made a typo while mentioning year of investment ,it should be 2003 instead of 2013.

if that is the case... then you are eligible for exemption of 54f. deposit the gains in "capital gains account scheme".. and thus you can delay your tax on capital gains... later withdraw money from this account either to purchase new plot or construction of house on existing plot... withdrawal from such account can be for no other purpose other than mentioned above. another point to remember while claiming exemption u/s 54f is that you must not own more than one property other than new property to be acquired...

Thank you very much for your response and much appreciated !! Have a question regarding - capital gains account scheme , Do i required to deposit complete money which I got it by selling ?? Or its only tax capital gain tax amount ??

Thanks again !!

Regards

Jagadeesh

 

 

 

 

 

only amt of capital gains is reqd to be deposited in capital gain account scheme within 6mnths from the date of transfer.

Thanks again for the information and your help much appreciated !!

Regards

Jagadeesh

 

 

you're welcome....

KINDLY NOTE THAT U/S 54F NET CONSIDERATION IS TO BE DEPOSITED and not the capital gain amount

[ "net consideration", in relation to the transfer of a capital asset, means the full value of the consideration received or accruing as a result of the transfer of the capital asset as reduced by any expenditure incurred wholly and exclusively in connection with such transfer.]

 

Also note that if you are going to buy the plot then exemption can be availed only if such plot is used for the CONSTRUCTION of residential property.Mere purchase of plot does not entitles benefit u/s 54F

 

There are some more options available like 54EC, wherein you have to invest in bonds of NHAI or RECL, max amt of deduction is 50L

Other option is 54GB, wherein you will have to create a CO., see section for more details

Thanks, If I understand - you are saying - I have to invest complete amount ( in my case 36 lakh) in capital gain scheme.

Next my question is - I am going for construction of house immediately (note that – I am going for construction on plot , which purchased long back) , now 

1.Hope , I am eligible for construction of hose on plot which was purchase long back ??

2.Since I am going for immediate construction , do i still required to deposit in capital gain scheme ??

3.Planning to complete construction by Feb'2014 , what is the proof do I required to produce to justify that I fully used amount which I got by selling ?? Do I need to get letter or any certificate from builder to show that it costed so much money ??

4.While filling income tax for next year ie Mar2015 – what is that I have to take care ??

Thanks in advance

Regards

Jagadeesh

IMMEDIATELY DEPOSIT THIS AMOUNT IN CAPITAL GAIN ACCOUNT SCHEME,IF YOU SOLD THE PLOT TILL 31ST MARCH 2014

DEAD END IS 31ST JULY (TOMORROW), PRESUMING DUE DATE FOR YOU U/S 139(1) IS 31/07

REST DETAILS IN NEXT POST

You mentioned that property (plot) was sold in 2014 without the date.I hope that its of after 31/03/2014

 

 

36 Lakhs less Cost of transfer like any brokerage etc you paid for facilitation of Sale,and you'll need bill if you want to claim cost of transfer

Yes exemption shall be allowed on construction

Note that exemption shall be available on amount invested, for the purpose of construction,investment would mean actual outflow of fund.Which would not be possible in your case.Meaning thereby you will have to deposit the amount in capital gain account scheme by the due date of filing of return u/s 139(1) which could be 31/07 or 30/09 (if audit is required) of the coming financial year (i.e if plot was sold in April 2014 you have time till 31/07/2015)

 

Construction can be on old also but in that case you won't get exemption on cost of plot, if however you buy new plot then cost of new plot + cost of construction will be allowed for exemption

 

You mean Feb 15 ? No problem, as and when you will need the money you can withdraw it from the bank,there are several forms for that like for opening of A/C, selecting Nominee, Withdrawl of money etc. When you will opt for opening the account in scheme the bank employees will tell you in detail about the scheme.If you still need any info, you can study the relevant forms besides we will also be happy to help.

 

You can not file ITR 1, you will have to see at the end which ITR you would be filing but ya it wont be ITR 1 or 4S

Thank you very much for detailed explanation....

Sorry I forget to mention the sold date - it’s during May 2014.

Sorry - I didn’t fully understand your following point, Can you please let me know more in detail "Note that exemption shall be available on amount invested, for the purpose of construction,investment would mean actual outflow of fund.Which would not be possible in your case."

Also you mentioned that "if plot was sold in April 2014 you have time till 31/07/2015"
Since, I will be starting the construction immediately and planning to finish construction by Feb2015 - I will be fully utilizing the money which I got by selling the plot , without depositing in capital gain scheme - is this something justifiable ??

Thanks much in advance!!

~Jagadeesh

In your case you would have time to invest in cap gain scheme by 31/07/2015

Since you would be completing the construction prior to that then there is no need for deposition of sum

Actually you also wrote Feb 2014. I knew it would be 2015 but while answering It split away from my mind (Sorry, I wrote the post in many intervals so it slipt away)

I hope its clear now

Great - Thanks !! Sorry for my typo’s

Sorry have last question ( hopefully :() )

What document do I required to produce to IT to show that i fully utilized the money (got it by selling property) for constriction of house ??

And when should I inform about same to IT, during Mar'2015 time frame?? OR while filing returns ??

Thanks !!

Best Regards

Jagadeesh