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Query in regards to Long Term Capital Gains tax with regards to Sale of Commercial property

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Chetan B Zhaveri

3 Points Posted on 01 January 2020

Sir: I had purchased a shop in the year 2009 for a sum of Rs.400000+Rs27500(stamp duty)+Rs.80000(agent Com)+Rs.150000(Shop color & maintenance)= Total Rs.657500/-. Now I am on the verge of selling the shop property for Rs.3500000/-. What shall be my LTCG? I don't have any home, Can I invest the proceeds in my 1st home?, What part should I invest so that my capital tax be nil? What is the time frame with in which I need to buy my new home? If I am unable to find a new home in your stipulated time what should I do next?

I shall be obliged if I get my reply asap.

Replies (2)

Quick Summary

This discussion addresses the calculation of Long Term Capital Gains (LTCG) tax for a commercial property purchased in 2009 and now being sold. It explores options for reinvesting the sale proceeds into a first home to potentially reduce or eliminate capital gains tax, including the required investment amount and timeframes for purchase or construction. The advice also touches on how the tax treatment might differ based on how the property income was previously declared.

rama krishnan

12244 Points Posted on 03 January 2020

Under which head you have been admitting the income from commercial property?
if it's under pgbp and you have availed depreciation on commercial property then the sale of commercial property will be dealt in accordance with the provisions of section 50 and under section 45.
if you have admitted under the head income from house property then the entire net sale consideration needs to be invested in house property within 2 years (purchase) or within 3 years (construction)