If someone is selling a property in cash for X amount & deposit the entire cash into the bank. How long will this amount/income from the sale of property is exempted from levy of income tax?
This income generated from the sale of this property will be spent on construction of a house on our paternal piece of land. Will we be required to pay any tax on it?
Kindly advice.
To gain tax exemption from income form sale of property, you should purchase a property or u should invest in "capital gains deposit account scheme". you should purchase or construct a property with in 3 years. if not it will subject to long term capital gain tax after three yaers.for example your receipt from sale of original asset is Rs.50 lakhs, If u invest 30lacs in purchase of new house property and invested in construction for Rs.15 lacs means remaining 5 lacs will b treated as long term capital gain.(if it is unutilised till the end of third year, it will be taxable at 20%)
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