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VS Vedhagiri (Chartered Account)     26 June 2021

Capital Gain Plan

Dear Members

My client sold his residential land in April 2021 with capital gain of Rs 1.78 cr. He wants to know whether he can invest in OLD and renovated residential  house for Rs 2.75 Cr. What is the time limit for the investment if he can invest in OLD house. He owns a residential flat



 7 Replies

Sourav

Sourav (Student)     27 June 2021

Investment should be made within 2 years from the date of transfer subject to 1 year
VS Vedhagiri

VS Vedhagiri (Chartered Account)     27 June 2021

Thanks Is investment in old house allowed?

Sourav

Sourav (Student)     27 June 2021

Yes.... But it should be renovated
CMA Poornima Madhava

CMA Poornima Madhava (CMA)     27 June 2021

As I understand, there is no restriction to buy/construct only a new house (i.e. even existing house may be purchased).

House to be bought within 2 years from date of transfer. However, if not purchased before due date of filing of ITR for the relevant year, then amount to the extent of unutilized capital gain to be transferred to a capital gain deposit account.

So in this case, since the sale is effected in April 2021, you need to utilitze the gain by July 2022 (subject to any extension).

VS Vedhagiri

VS Vedhagiri (Chartered Account)     27 June 2021

Thanks for your reply. Are you sure about the date of the utilisation.


“So in this case, since the sale is effected in April 2021, you need to utilitze the gain by July 2022”

I thought it is July-2021

 

thanks

ajeet singh

ajeet singh   29 June 2021

First the an capital gain saving account to be opened the money is to deposited in the same either it will be problematic
Sourav

Sourav (Student)     18 July 2021

Agree

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