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Tax on sale of site

07 July 2018

I purchased a site in Bangalore in 2002 for 5 lakhs and sold in 2017 for 15 lakhs.

1. Now, do we have to pay tax on this long-term capital gain from selling this site if I buy an apartment in 2018 August and its construction completion is in 2021.

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5 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (195640 Points)
Replied 07 July 2018

No need to pay LT CG tax....

But you have to declare the same in ITR and claim exemption u/s. 54F

KOUSHAL JAIN (Chartered Accountant) (471 Points)
Replied 07 July 2018

Long Term Capital Gain

=Sale Price - Indexed Ciost of Acquition

= 1500000 - 500000*272/105 = 204761

Basic conditions Following conditions should be satisfied to claim the benefit of section 54.

 The benefit of section 54 is available only to an individual or HUF.

 The asset transferred should be a long-term capital asset, being a residential house property.

 Within a period of one year before or two years after the date of transfer of old house, the taxpayer should acquire another residential house or should construct a residential house within a period of three years from the date of transfer of the old house. In case of compulsory acquisition the period of acquisition or construction will be determined from the date of receipt of compensation (whether original or additional).

With effect from assessment year 2015-16 exemption can be claimed only in respect of one residential house property purchased/constructed in India. If more than one house is purchased or constructed, then exemption under section 54 will be available in respect of one house only. No exemption can be claimed in respect of house purchased outside India.

Anjali P Nair (ACA,ACMA) (582 Points)
Replied 07 July 2018

Long term capital gain will be applicable.But you will get exemption under section 54 since you are investing in new residential property(constructing within 3 years of transfer).

Pradeep Dsouza (4 Points)
Replied 07 July 2018

Thanks Koushal, You mentioned that

The asset transferred should be a long-term capital asset, being a residential house property.

But we sold an urban plot/site - Is this the same?

KOUSHAL JAIN (Chartered Accountant) (471 Points)
Replied 07 July 2018

Originally posted by : Pradeep Dsouza
	Thanks Koushal, You mentioned that The asset transferred should be a long-term capital asset, being a residential house property. But we sold an urban plot/site - Is this the same?

in the case of an assessee being an individual, the capital gain arises from the transfer of any long-term capital asset, not being a residential house Section 54F Applicable

Refer https://www.incometaxindia.gov.in/Acts/Finance%20Acts/1982/102120000000036022.htm