Hello
I am selling my house which will lead to a capital gain.
I live in a standalone house. I plan to use the capital gains from the house sell to build another floor on top of my current house.
Can I do this without paying taxes on the capital gain?
Is this considered same as reinvesting the amount in another property within 2 yrs timeframe to save on the capital gain tax?
Thanks.
The long-term capital gain on the sale of property is exempted if the proceeds are invested in the purchase or construction of a house. The purchase of property can happen a year before the sale of the property in question or two years after its sale. Alternatively, one can invest in infrastructure bonds notified by the government. But one has to be mindful of the fact that these investments have a lock-in period.
Yes, the investment can be used to construct the new floor of the property. Please use the 2nd floor as a separate house.
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