Capital gains on sale of plot (sold a plot and bought a flat in 6 months)

Rijo 1
Viewed 1911

I sold a plot (acquired it on Aug 19th,1997) and sold it on Feb 18th,2011 for 30L. I came to know about the Income Tax info that i have to buy another residential house in 6 months time, in-order to reduce the tax. And, I did buy a flat last week. Initially i paid the vendor an amount of 3L as token in July and the rest 28L in the first week of August (on the day of registration). Can anyone let me know regarding the tax implication for this situation? Should i be transferring the amount obtained from selling the plot to Capital Gains as soon as i sold it?How much tax should i be paying now?how much would be exemption amount? Please help me out...

plot-sale section-54f long-term-gains capital-gains income-tax

Mr. A sold his non agriculture land on Sep.’2014 for Rs.1400000/- . He converted this land from agriculture to non-agriculture in June’ 2010. He doesn’t have purchase value as the land was belong to his grandfather. For LTCG calculation the index value should be taken as per land rate prevailing on 1981 or 2010 ?. Pls help me to calculate capital gain.

CA VIJAY•

Purchase price would be taken as fair market value as in 1981.

Pankaj Batra•
1 Answers

Under section 54F, new house can be bought within next two years from sale of old property.

As property was not purchased before last date of tax return filing for sale financial year (31st July, 2011 here), sale consideration amount should have been invested into capital gain scheme account and further payments should have been done from there.

As you bought new house for amount (31L) more than sale price of old plot (30L), there won't be any income tax payable.

If you have already filed return for FY 2010-11, you would need to file revised one. In case any tax is due then there will be penalty payable u/s 234A,B and C.

Also, please follow below conditions for section 54F:

  1. You should not be owning more than one residential house(flat/house/apartment) at the time of buying new property.
  2. If total residential houses owned by you is two (including new property), you should not buy another one within next three years of purchase. Or in next three years, total owned residential houses should not be more than two.
  3. New property should not be sold before next three years.
Pankaj Batra5212

Thanks a lot Pankaj!!! I would like to add that the amount obtained from selling the old property was through a check(to my savings accnt) and the amount was not moved since then. I didn't know about transferring the amount to Capital Gains Scheme account and so, i withdrew 3L on 27th of July(as token amount) and the remaining amount on 9th of August, both are done in checks. The returns are filed on 31st of July and the amount is not transferred into capital-gains. Can i know whether the tax is payable for the whole amount? Is there anything i can do to reverse the hitch caused due to awareness issue?

Rijo•

IT department may raise demand of income tax on capital gains as same was not deposited into capital gain accounts scheme. I would advise you to consult a reputed tax professional/CA and get this rectified as soon as possible. You may have to file revised return asap.

Pankaj Batra•
Related