Re investment of LTCG gains in mixed use property

Hi Gautham

You will not get any benefit if you invest in any commercial prooperty.

Best option is to invest some part in bonds as per section 54 EC and rest in residential property.

If you want to know more please let me know.

regards

CA Rajesh Balsara

Dear Goutham,

As the sold out property is a commercial property, you can avail exemption u/s 54F of income tax act, 1961. 

For claiming exemption under this section, you are supposed to invest the entire sale consideration in the residential house property for getting full exemption. because this section only allows to get an exemption in the proportion of sale consideration and capital gain. 

The reinvestment property should be residential house property only. so for your second part of your question, the proportion of the amount which you invest in the top floor of the commercial property inwhich you are going to reside, shall be allowable as exemption. 

in case of investing the amount in bond of RECL or NHAI, you can invest only Rs. 50 lakhs per year. 

I hope it shall assist you, For any further queries, please contact any Chartered Accountant.

Thanks

CA Gokul Raj,

Dear Rajeshji

I am not at all interested in buying residential property for personal reasons.

Hence what is the tax I have to pay on this 5 crore Rs profit (which is calculated after indexation of cost and indexation of improvement ).. Assuming I am investing 50 lakhs in REC bonds etc.

Will it be 20% of 4.5 crores(profit 5 - REC .5)? or any other figure?

How can i reach you for consultation?

Regards

Yes Correct

If Rs. 5 crore is profit after indexation than you can claim deduction u/s 54EC upto Rs.50 lacs of investment. There could be many other way of tax planning too by taking benefit of other sections.