Tax on Sale of LAND & further Investment of the Money in Stocks

Dear Peers, Pranam!

Regarding a Property (Land) Sale in Coimbatore District. In the last year (October 2020) I have been sold a land and gained (with ref. to the value recorded on the deeds) more than fifteen lakhs rupees. I have not been bought any other land/property with that amount But invested part of the amount for buying of stocks/shares. It has been told by one of my friends that I coan not invest this money in stock market and I should have property gain tax to be paid to the ITD in this financial year. Please let me know how much amount I should paid (or the percentage of gain as tax) and whether I have any issues for investing that amount in stock market as I mentioned above.

Please guide me if I have been misguided on this regard.

Thanking you, gk

Replies (3)
Quick Summary
This discussion addresses the tax implications of selling land and reinvesting the proceeds. The user sold land for over fifteen lakhs and invested part of the money in stocks. They are seeking clarification on capital gains tax rates, specifically whether the gain is short-term or long-term, and if investing in the stock market is permissible after paying the relevant tax. The possibility of tax exemption by purchasing another property is also explored.

If such land was acquired 2 years prior to sale, Rs.50 lacs would be a long term capital gain taxable @ 20%. Indexation benefit is available in case of long term capital asset.

If such asset has been sold within 2 years from purchase, then short term capital gain and tax at slab rates would apply.

Further, no restriction to use such gains for investing in the stock market (if tax on capital gain has been paid). However, if you invest in buying another house, you may claim exemption from long term capital gain u/s 54F, subject to satisfaction of specified conditions.

Thank you very much madam for the clarifications,
its a plot and bought in 2008/2009. So the tax is 20% of fifteen lakhs, means rupees three lakhs to be paid.
Thank you madam once again,
gk

Dear Poornima Madam,

Pranam! Whether I could use this money to buy another land / house / flat - so that I could get any exemption from tax? if so .... is there any time period / duration within which I should buy this property?

Thanks

 

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