Recently, I have sold (transferred) one property...I gained around 20 Lacs....I sold this property after 4 years of signing Buyer's agreement...Does this amount come under long term capital gain or short term capital gain? If it comes under long term capital gain, then can I show the amount(30 lacs) I invested 6 month earlier to save tax under long term capital?
1 Answers
In case of residential properties whose possession has been taken, long term gains is assumed only when sale happened after three years of possession. Before such period, its assumed as short term gains.
If possession is not taken then three years can be counted as from agreement date. In case flat is sold after possession, tax benefit can be taken u/s 54 otherwise section 54F would be applied.
In case its a short term gain, there is no way to save tax and whole gains would be added to your taxable income and taxed as per slab rates.
In case of long term gains (either 54 or 54F applicable), you can buy residential property to save tax. Even if purchase of new residential property is within one year before sale, tax benefit can be taken.
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