Window for investment in housing property to save capital gains tax

Tax planning 364 views 9 replies

Pashupati Davella

7 Points Joined January 2020

I co-founded a private limited company in IT sector in India and sold my shares to a foreign company. I am resident Indian.

I received the proceeds in my bank in Jan 18 and set aside some money for buying a housing property (I have one property already). I placed it under relevant FD in June 18. I paid advance tax on 15th March 18, showing this inward remittance. The actual share transfer took more time, due to the procedures involved.

I have now finalized a house, which is ready for possession and occupancy certificate received. Still in negotiations stage. No deposit made etc.

But, I have crossed Jan 20, 2 year period.

The FCTRS for inward remittance was received in Sept 18 and Board approved share purchase from me in Sept 18.

My question is, can I still buy a house with OC received and avail tax benefit? Have I crossed 2 year window to buy a readymade house? Can I get an extension and if so how to approach the issue with authorities?

But

Replies (9)

Roshni

Studwnt

1141 Points Joined February 2016

You already paid advance tax ? for what ?

Pashupati Davella

7 Points Joined January 2020

Towards Capital gains, I laid advance tax on 15th March 2018.

Roshni

Studwnt

1141 Points Joined February 2016

If you already paid tax then why do you want to invest.

Pashupati Davella

7 Points Joined January 2020

I think I did not make myself clear. Imagine I received Rs 1000 as proceeds for sale of shares in Jan 18. I showed Rs 100 as planned investment in housing and placed this amount in Capital gains FD in June 18. On balance 900, I paid advance tax on 15th March and of course filed my return by end July.

Now this Rs 100 which I set aside needs to be invested in property. Question is for this only

Roshni

Studwnt

1141 Points Joined February 2016

According to law you should invest in 2 yrs so by that time lapsed and need to pay tax on that...but general main toh idhar udhar chalta Hain ...invest it within reasonable time.

Pashupati Davella

7 Points Joined January 2020

I wish department were as understanding and reasonable. My question is 'from.which date will the 2 year count down start, as per law'

Roshni

Studwnt

1141 Points Joined February 2016

2 yrs after the date of transfer.

debora M

BUSINESS DEVELOPMENT MANAGER

1697 Points Joined February 2019

as per law the count down starts after the date of transfer

CA Saigal

Practice

4 Points Joined November 2017

Although the period of 2 years starts from the date of transfer but in your case you need to check what is the actual date of transfer of shares..Mere receipt of consideration for shares would not amount to transfer of shares. Transfer of shares is complete only when the share certificates are actually handed to the buyer.