I have consulted some CAs offline and got different replies. So need someone with expertise on capital gain to answer my query.
I sold a residential house and parked the funds in capital gains account. To avoid tax on Long term capital gain, the capital gain needs to be reinvested within 2 years in resale or 3 years in under construction property. I have the following queries with regard to under-contruction:
#1 Do I have to invest some amount of capital gain before 2 years and then I get 1 more year for construction and to utilize the whole amount? OR I can start using the capital gain after 2 years...say buy a plot even after 2 years and then start constructing and consume whole of capital gain after 2 years and before 3 years?
#2 For above purpose, i.e. under-construction property, if I have sold my property in April 2011 and if i buy a DLF apartment from a reseller X and this apartment is still under-constrution from DLFs point of view, I mean estimated possessions/completion time is say Dec 2013. Then can i buy this apartment after April 2013 (2 years of sale) and before Dec 2013(date of construction completion) to get exemption?
Any expert advice would be highly appreciated.
Thanks in advance,