Chartered Accountant
81 Points
Posted on 26 March 2012
The amount of capital gain deposited in the LTCG a/c shall be used to purchase a residential property within 1 year before (or)2 years after the date of transfer (or) construct a residential property within 3 years from the date of transfer.
In case you plan to use the amount deposited to purchase commercial property, please be prepared to pay Capital gain tax that you saved when you had sold the residential plot in Dec 2011.
Even if you plan to purchase/ construct a residential property, it is important that you invest the whole of the capital gain amount in purchase/ construction. If the amount of capital gain is more than the cost of the new asset, then the difference will be charged as your income for the previous year u/s 45.
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