Dear Sir, I an selling a land (not agricultural) and want to save capital gain tax. Can i buy a commercial Complex from that money? what will be my liability to pay tax in that situation?
1 Answers
On purchase of a commercial complex, no income tax benefit would be available. You can purchase same after paying income tax on capital gains earned from plot sale.
Tax liability can be computed by below provided formula:
Purchase Year = A
Purchase Cost = P
Cost Inflation Index (CII) for purchase year = X
Sale Year = B
Selling price = Q
CII for sale year = Y
Indexed Purchase price = P x (Y/X) = R
Long term capital gain = Q - R = S
Income tax on capital gain = S x 20%
Wont purchase of a RESIDENTIAL PROPERTY be eligible for tax-exemption under Sec 54?
Yes, if residential house property (build up and not plot) is purchased tax benefit can be taken under section 54F. Or if a plot is bought and a house is constructed on that.
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