Capital gains investment on under construction property

Tax queries 385 views 3 replies

Anirban Sengupta

5 Points Joined August 2018

I have a query on capital gains to be used in purchasing an apartment whose posession might be delayed . after selling a property we need to purchase a house in 2 years or build a new one in 3 years to save long term capital gains tax

I sold my house in apr 2017 and put the money in CGAS.. Which means i have time till apr 2019

I am looking to invest the money in a society apartment which i will get only in late 2019 . It’s running delayed . But i will be spending the entire capital gains in downpayment of that house before april 2019. So mathematically, i have invested the capital gains within the 2 years, But will get possession of the house after April 2019. Is this case a valid investment of capital gains.

Replies (3)

Ankita Chachan

practitioner

548 Points Joined February 2012

This is avalid investment as u have purchased the property within the time limit..

Anirban Sengupta

5 Points Joined August 2018

Thanks ! Just to clarify, i received x amount of money as capital gains from previous sale (apr 2017) which i competely use before apr 2019 in buying a house , possession of the house will be after apr 2019 and remaining money (stamp duty plus remaining money- which is not capital gains) of the house will be paid when i get possession (tentative dec 2019) . Also do i get 2 years or 3 years in such scenarios?

Gauthami

Student CA Final

431 Points Joined December 2014

the restriction of 2yrs or 3 yrs time limit is restricted to amount of income from capital gains...There is no time limit restriction for usage of sale consideration received excluding capital gains.