captial gain tax on a sale of a commerical shop

Dear pankaj

can you clarify if my father who brought a commercial shop in 2001 for 3 lakhs now sold the same this jan 2012 at 15 lakhs after calculating the captial gain after indexing the captial tax is on 9 lakhs rs approx my father already has a 2 residential houses on his name can u clarify if the said amount can be purchase another residential house or invest in captial gain bond or if the same amount can be invested in agriculture land

thanks sanjay

asked Feb 01 '12 at 12:32 by sanju82 1111

For investment in another residential house, the property sold should also be a residential property...

answered Feb 02 '12 at 01:38 by CA Karan Batra 53216


There are two ways to save income tax on long term gains from assets other than residential properties.

First is section 54F, in which one has to buy a residential house property. As your father already own two house properties, he won't be eligible for this section.

Second option is section 54EC, in which can invest into capital gain bonds. In order to save tax fully, your father would have to invest whole sale consideration amount (Rs 15 lakh) into capital gain bonds before six months of sale of shop.

answered Feb 10 '12 at 14:00 by Pankaj Batra 5.2k320

Please clarify... What about tax saving if the father buy another shop with the gained amount..instead of investing in residential property or bonds...
(Aug 09 '14 at 14:09) sakiv1089
There would not be any tax benefit if a non-residential property is bought.
(Aug 11 '14 at 11:46) Pankaj Batra

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Asked: Feb 01 '12 at 12:32

Seen: 5,623 times

Last updated: Aug 11 '14 at 11:46