Hi,
My dad sold a commercial property for 2 cr, what are the ways where I can avoid the payment of Long Term Capital Gain Tax on this amount. I am told to invest nothing more than 50 Lac in NHAI (National Highway Authority of India) or REC (Rural Electrification Board) for a period of 3 years, but i am still left with 1.5cr of taxible income. Is there a provision where within a certain duration of time, I could reinvest in another comercial property and avoid the tax payment.
Income tax on long term gains from assets other than residential house property, can be saved by either investing into capital gain bonds u/s 54EC or by buying/constructing a residential house property u/s 54F.
Max amount which can be invested into capital gain bonds is 50 lakh per financial year. This investment has to be done within six months from sale. If two financial years fall in this six month period, one can even invest upto one crore (50 lakh each financial year).
If a new residential house property is bought, possession for same should be done within two years from sale. If construction of new house is done, it should be completed within three years from sale.
There is no tax benefit on investing into commercial property or residential/commercial land.
