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

Replies (7)
Quick Summary
This discussion explores whether a client can use capital gains from selling residential land to purchase an older, renovated house. The key question is about the eligibility of existing properties for capital gains tax relief and the specific timeframes for such investments. Advice suggests that while older homes are permissible, renovation is often a requirement, and funds must typically be invested within two years of the sale date, with potential implications for tax filing deadlines.

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

Thanks Is investment in old house allowed?

Yes.... But it should be renovated

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).

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

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

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