selling a flat in bangalore to by an agricultural land

hi pankaj, greetings to you.iam phiroz from mumbai.i have a flat in my wifes name in bangalore which she had purchased for 23lac in 2008 n now may be 30lac n hence completing 3yrs in may2011.i want to sell that flat and buy an agricultural land in maharashtra on my mother in laws n her name,as her grand father had his name as an agriculturist.she plans to build a house on the plot.its measuring appro 10acres.can she do this by using the entire amount. the stamp duty,registration n wall making expense can be included in this. if not,can she N/A certain area of land and show the purchase.pls advice

asked Mar 26 '11 at 14:09 by phiroz 1111

First of all, the capital gain amount (after indexation calculation) will be very small, less than 2 lakhs Rs, in case the flat is sold around 30 lacs.

To save income tax on this capital gain, one can invest the gain amount (around 2 lakhs) into another residential property within 2 years or a new house has to be constructed within 3 years after sale of flat. But this rule is not applicable for agricultural land, only residential property will be considered for tax exemption.

Another way to save tax is to put the gain amount (~ 2 lakhs) into capital gain bonds. Rest of the money can be used for anything.

answered Mar 26 '11 at 23:44 by Pankaj Batra 5.2k320


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Asked: Mar 26 '11 at 14:09

Seen: 1,445 times

Last updated: Mar 26 '11 at 23:44