Saving capital gains by constructing house on previously bought plot of land

I bought a plot of land in February 2013 for Rs.900000. In Jan 2014 I sold my residential flat for Rs.6000000 from which I have a long term capital gain of Rs.3700000. Now I want to build a house on the previously bought plot of land. The construction cost will be Rs.3000000.

Can I claim full exemption on LTCG by including the cost of the plot (which was bought in the previous financial year) and the construction cost of the new house (which is built in current financial year). I do not own any other residential house or flat.

asked Jan 20 '14 at 19:01 by suroy 11


Dear Suroy

You can claim full exemption from Capital Gains.

Both the cost of the plot as well as cost of construction can be claimed as an exemption.

However, the amount that is not invested in construction before the filing of income tax return would be required to be deposited in the Capital Gains Account Scehme

answered Jan 21 '14 at 00:07 by CA Karan Batra 53216

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Asked: Jan 20 '14 at 19:01

Seen: 1,610 times

Last updated: Jan 21 '14 at 11:01