Tax on long term

My father has recently during Sept 2011 sold the property of his grandfather which was in his name and re-build during 1994 and the property was considered as partly commercial and partly residential. The sale proceeds of the above property re- invested in two nos. of residential plots in the name of my father and the balance amount distributed amongst two sons as gift. presently my father is not having any accommodation of his own and residing with me in my govt. quarter. Is any tax is to be paid by my father in respect of above two plots purchased during oct 2011

asked Jan 10 '12 at 12:45 by arungpf 11

Your father would need to compute long term gains on sale of property. On such gains, he would need to pay 20% income tax.

There is no tax benefit on purchase of residential plots u/s 54 and 54F. If you father constructs a residential house on these plots, then there can be tax benefit available.

answered Jan 10 '12 at 20:00 by Pankaj Batra 5.2k320

Dear Pankaj Thanks a lot for your valuable advice can you please comment of the following : Is the tax @20% on capital gain has to be paid with the financial year 2011-12 or my father is having 3 years time from the date of sale of property. further, if there is any tax benefit if my father buy on Flat out of the LTCG.
(Jan 10 '12 at 20:37) arungpf
Tax should be paid before 31st March, 2012. If its paid afterwords interest penalty would also be payable. If your father intends to save tax by investing into residential house property, he need not to pay income tax now. If new house is not purchased/constructed before 31st July, 2012, amount has to be invested into capital gain scheme account. This account can be kept for three years. If new property is purchased within two years of sale or constructed within three years, no tax would be payable.
(Jan 10 '12 at 22:21) Pankaj Batra

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Asked: Jan 10 '12 at 12:45

Seen: 1,931 times

Last updated: Jan 10 '12 at 22:21