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Capital gains tax

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GOPAL

Others

24 Points Posted on 11 April 2013

Can we avoid capital gains tax by reinvesting the money obtained through sale of

properety( Property inherited in 1964 and lying within Muncipal limits) for purchase of another property .

I was informed that if the property lies in Muncipal limits we have to pay the capital gains tax .

I also got the advice that if the seller does not have a house of his own, then he can invest the money for buying a house or land and need not pay the capital gains tax in such case. Is this correct?

Replies (1)

sourav jain

INTERNAL AUDITOR

128 Points Posted on 11 April 2013

Hello Gopal

You have 4 options to save your capital gain tax

1-- If the property sold by you is a Residential house property then you can invest the same for purchase of another residential house property. Sec 54

2-- If the property sold by you is a long term capital assets other than residential house peoperty than you can invest the same in purchase Specified Bonds ( NHAI) Sec 54EC

3-- If the property sold by you is a long term capital assets other than residential house peoperty than you can invest the same for purchase of residential house property ( if u dont have more than 1 residential house property at that time) deduction is allowed proportionetly

4-- If the property sold by you is a agriculture land (urban) than you can invest the same for purchase new agriculture land

I think the property you are talking about is a land as you stressing on muncipal limits...