Ltcg on sale of a residential property

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Rock

xyz

24 Points Posted on 09 October 2011

If an ancestral property (house) within municipal limits is sold after felling it down as it was very old structure would the gains be classified as LTCG from sale of plot or LTCG from sale of house? What are the options available in both cases to save tax?If it is income from LTCG on plot, can one save it by investing in capital gain bond within 6 months?IS any document like copy of registry required while showing the LTCG income in tax return?

We have purchased a plot in an approved colony within 4 months of sale of the property. My question is if we are to construct a house within 3 years to claim LTCG exemption, is there a rule on type of construction as only 25% of total area needs to be constructed otherwise as per the authorities. Is any completion or occupation certificate required for claiming LTCG exemption.

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C.A SHASHANK GOYAL

Chartered Accountant

362 Points Posted on 09 October 2011

Hi , I am of the opinion that it will considered as sale of the plot as the asset is to be seen at the time of transfer .Yes , if it is the capital gain it can be saved by investing in the bonds subject to the maximum limit of Rs 5000000.Also , you can save by investing in house property that is purchasing a plot and then constructing on it , however one room constructed on it will be considered as house property . But investing in bonds is covered under section 54EC , and house property is under section 54. If you are depositing in capital gain deposit account scheme then you will claim it on basis of receipt deposited.