Tax on Land sale


I puschased a plot in 2007 for INR 2,16,000 and sold in 2012 for INR 12,00,000. The selling price included a brokerage charge of INR 1,20,000. I had another house (bought in the year 2000),as a joint property with my mother, whose construction (house was built up only on ground floor which is now extended to 1st floor) was started in 2012. My mother took a loan of INR 10,00,000 for the construction and I invested INR 10,00,000 in addition to that loan. I would like to know if I can show this construction amount for tax exemption? If not, if I purchase another land for INR 22,00,000 out of which I give INR 8,00,000 as the advance payment and rest property loan from bank, then will this suffice for the tax exemption?



asked Mar 16 '13 at 16:52 by sonal 11

You can claim exemption u/s 54F for house construction. As your investment amount in construction is more than gains from plot sale, you need not to pay taxes on long term gains on plot sale. Construction should be completed within three years from sale of plot.

If you decide to buy another land, there won't be any tax benefit available unless you get a house constructed on this new land.

answered Mar 19 '13 at 15:20 by Pankaj Batra 5.2k320


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Asked: Mar 16 '13 at 16:52

Seen: 1,826 times

Last updated: Mar 19 '13 at 15:20