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Query about capital gain exemption

Saurabh (Software Professional) (31 Points)

08 July 2012

I have sold a residential plot on 7-May-2012 which resulted in capital gain tax. To get an exempton from capital gain tax, I'm planning to buy a new flat which is currently under construction and expected to be completed in June 2014.

1. Would I be able to get exemption from the capital gain tax ?
2. Do I need to put the money (came from sell of old property) into capital gain bank account before I
pay for new property (residential flat)

Please advice. thanks in advance. Saurabh

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7 Replies

praveen (Chartered Accountant) (6971 Points)
Replied 09 July 2012

IF you are paying the amount within march 2012 you need not deposit in the CG Account you can pay it off directly. Otherwise you will have to deposit in the CG Ac.

KARANDEEP,CA,B.Com,CS FNL (JOB) (457 Points)
Replied 09 July 2012

Originally posted by : praveen
	IF you are paying the amount within march 2012 you need not deposit in the CG Account you can pay it off directly. Otherwise you will have to deposit in the CG Ac.

Agree with Parveen Ji.

There will be no captial gain taxable, if you do the same.

Saurabh (Software Professional) (31 Points)
Replied 09 July 2012

Thanks Praveen for your reply but you said March 2012 which doesn't make sense as I have only sold the old property in May 2012. Please can you clarify.

Also, I will be liable for capital gain tax on 20 lacs but I'm only investing 15 lacs in new property, would that be a problem?

Thanks - Saurabh

Ankush sharma (Auditor Article Assistant) (816 Points)
Replied 09 July 2012

Deposit the money in CGD a/c if are dont pay the amount of houes with in ITR date 31 july 2013 else pay the amount of the house before due date you will get full exemption us 54

Saurabh (Software Professional) (31 Points)
Replied 11 July 2012

Ankush,

Thanks for your reply. You said I need to pay before 31st July 2013, why is that? How did you work out that date?

Also, I will be liable for capital gain tax on 20 lacs but I'm only investing 15 lacs in new property, would that be a problem?

Thanks in advance

Regards Saurabh

Ankush sharma (Auditor Article Assistant) (816 Points)
Replied 11 July 2012

31 july 2013 is the due date of income tax return income of previous year will be taxable in assessment year

as per your querry

assuming that house property has been sold long term and investment will be in new house

LTCG 20 lacs

less exemption u/s

54 15 lacs

taxable ltcg 5 lac

tax @ 20.6%

CA Krishna Chaitanya M (Chartered Accountant) (463 Points)
Replied 11 July 2012

yes, if capital gain amount is not invested within due date of filing return of income, there is need to put those money in capital gain account scheme maintained by sheduled bank, there after any investment in new property utilised by drawing amount kept in capital gain account scheme