LTCG on sale of plot for joint owners

manish (author) (68 Points)

03 July 2010  

Dear friends,

A & B were allotted a residential plot in February 2007.  (registry still not done).  They sell the plot in May 2010 for an amount of Rs. 1 crore.

How should they proceed further in order to avoid LTCG ?

Suppose A&B decide to purchase a residential plot costing Rs. 1 crore (in joint names).  Whether they would be still liable to LTCG or they will have to do construction on the plot within three years?

If construction is a must to save LTCG, then how much construction? 

 Since the entire sale consideration has already been invested in the cost of the plot, whether A or B can do construction from his own funds?

please reply accordingly to the above questions.

thanks in advance

manish