Long term capital gains tax

I have sold a plot in 2009 Dec for 15 laksh. Out of the proceeds, 10 Laksh I have invested in 2009 itself into a apartment which was being built. I was told by the builder that the pocession / regitsration will be done by 2011 Dec. But now the builder says its delayed.

  1. Since the apartment was being built, what is the number of years which I can wait for posession / registration for claiming the LTCG benefit? Is it 2 or 3 years?
  2. If the apartment registration is delayed because of the builder beyond 2 / 3 years, then what is my tax liability?
  3. Out of 15 Lakhs I gained, only 10 lakhs i invested, by when should I invest the rest of the amount for the tax beneift?
  4. If I dont pay additional 5 lakhs to builder, can I claim for partial amount (10 Lakhs) only for the LTCG?

asked Nov 19 '11 at 14:58 by preethamk 1123


  1. Under section 54F, new residential property should be in your name within two years of sale (by Dec 2011).
  2. If possession/registration is not done within two years, you would have to pay income tax on long term gains, that is 20% on LTCG.
  3. In case of a plot, to save tax fully, whole sale consideration amount had to be invested by Dec 2011.
  4. If you can get possession by Dec 2011, you can claim 10 lacs for tax benefit and pay income tax on remaining gain proportionally.

One issue I see is that you have not deposited sale consideration into capital gain account scheme by 31st July, 2010. If it was not done, your tax benefit unfortunately won't be applicable.

answered Nov 19 '11 at 22:29 by pankaj 5.2k320

link

Know someone who can answer? Share a link to this question via email, twitter , or facebook
.

Your answer
toggle preview

Follow this question

Once you sign in you will be able to subscribe for any updates here

Markdown Basics

  • *italic* or __italic__
  • **bold** or __bold__
  • link:[text](http://url.com/ "title")
  • image?![alt text](/path/img.jpg "title")
  • numbered list: 1. Foo 2. Bar
  • to add a line break simply add two spaces to where you would like the new line to be.
  • basic HTML tags are also supported

Tags:

×777
×339
×326
×56
×3

Asked: Nov 19 '11 at 14:58

Seen: 999 times

Last updated: Nov 19 '11 at 22:29