Sir,
I will be shortly disposing my house for an amount of Rs. 10 lakhs and will be investing the amount in the purchase of a land whose value will not be less than Rs. 10 lakhs. I own a house now other than the one disposed.I also own a small plot of land from a cooperative housing society.
Kindly let me know about my tax liability and way if any to avoid the same. I am a government employee submitting my tax returns and paying income tax promptly
As per section 54, you can save income tax on capital gains earned by investing the gains into a new residential house property or get a new house constructed.
If you buy piece of land but not build a home on it three years from sale of old flat, income tax benefit cannot be taken.
Under section 54, whatever other properties already you own does not matter.
If new house is not bought/constructed before income tax return filing last date (31st July), then gains has to be deposited into capital gain account scheme.
