Buy Residential Property Against The Sale Of Agricultural Land

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We sold our ancestral Agriculture Land now we want to buy residential property. We already own residential property. but So can u plz tell us can we get tax benefit by purchasing second property or please advise how do we go about it.

1 Answers

You can save income tax on capital gains by investing into residential property under section 54F.

To save tax fully, new residential house property's cost should be more than sale consideration price of agricultural land.

Please follow below conditions for section 54F:

  1. Possession of new property must be taken within two years from sale of old property. Or new house can be constructed within three years of sale.
  2. You should not be owning more than one residential house(flat/house/apartment) at the time of buying new property.
  3. 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.
  4. New property should not be sold before next three years.

Thanks, One of my doubt is cleared here...hope the conditions/IT rule is same as on today also i.e. july'15. If not please confirm the change.

Rules are same as of now.

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