Capital gains on commercial land investment

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I sold residential land and earned a capital gains of 40 Lakhs. I invested the entire gain amount in purchase of commercial land and planning to construct a small 1 Bhk house or single bedroom in commercial land.Can i take exemption under section 54F ? pls let me know
Replies (4)

Yes, provided the local authority sanction plan of residential unit over the land.

Also provided you construct the residential house within stipulated time period.

Ok...if I construct factory shed as well in commercial land with approval of local authority, can I claim capital gains exemption? pls confirm

The condition stipulated is for residential house.

If the land is larger in area, only the cost of land over which house is constructed would be considered for exemption.

Any other units constructed over rest part would be out of consideration.

Commercial purpose or residential purpose is irrelevant:
1. exemption available if for residential or commercial purpose.
2. but within the stipulated time.
3. with the approval of local authority.


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