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Capital gains used for house construction

Shine (Mechanical ) (215 Points)

22 June 2023

I sold my land and with that money I am presently constructing a house in my new land.

I will have to spend more amount on the new house.

Should i put the amount i got from the sale in a capital gain account and use the funds from that account to construct the house.

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6 Replies

Komal Barapatre (210 Points)
Replied 22 June 2023

Yes use the capital gain amount in constructing house

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160342 Points)
Replied 22 June 2023

You are correct, you may deposit the sell amount in the CGAS account and as and when required can spent it from that account. By this way, you will be able to save the LTCG u/s. 54F from the land sold.

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sabyasachi mukherjee (26073 Points)
Replied 23 June 2023

Either deposit in Capital gain account scheme or in any other house property. 54EC BONDS

Shine (Mechanical ) (215 Points)
Replied 24 June 2023

Within how many months soon after selling property should i put the money in capital gain account?

I already started construction within a month of selling property.

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160342 Points)
Replied 24 June 2023

The amount should be used up or deposited to CGAS account before filing relevant ITR

Sanjana Mohanty (100 Points)
Replied 27 June 2023

Yes, you should consider putting the amount you received from selling your land into a capital gain account. This account can help you defer taxes on the capital gains. You can then use the funds from that account to construct your new house.