cpc

long term capital gain


i purchased a residential house for 70 lakhs in 2001 , and i want to sell it now , 

i am gettin 4 crores for it  , to get exempt from LTCG tax do i have to invest the entire sale consideration or only upto the capital gain amout in another property?

i want to buy new house worth 2 crores and invest the rest elsewhere 

and can i purchase a commercial property or i have to buy a residential property?

and lastly can i purchase the new property in my son's name ??

thanks 

 
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Practicing Lawyer

Dear,

Your query and possible answer :

 

i purchased a residential house for 70 lakhs in 2001 , and i want to sell it now , 

i am gettin 4 crores for it  , to get exempt from LTCG tax do i have to invest the entire sale consideration or only upto the capital gain amout in another property?

 

ANS : You are required to invest only the amount of Capital Gains you are earning out of this transaction.

 

 

i want to buy new house worth 2 crores and invest the rest elsewhere 

 

Depending upon, whether or not you will be eligible for deduction u/s 54, the amount invested in new house shall be allowed as deduction and any amount in excess thereof shall be chargeable to LTCG @ 20%.


 

and can i purchase a commercial property or i have to buy a residential property?

 

Ans : No deduction is available for purchase of commercial property.

and lastly can i purchase the new property in my son's name ??

 

Depending upon your age and healthy conditions, you may opt for buying the property in the name of your son, although the Act is silence about it, many courts have in the past held in favour of assessee.

 

Thanks 

 

 

 

 
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Assistant Manager- Taxation

Yes, Investment of "Capital Gains" araised  is Sufficient. You need not Invest " All the Money Received" for Exemption under section 54.

Refer Section Analaysis of Section 54 on this Link:http://www.exploreincometax.com/Indian-Income-tax-Act-1961/Section-54

To Know How Capital Gains Are Calculated Under Income Tax Act, you Can Refer 'Analysis' of Section 48, "Method Of Calculation of Capital Gains", Given on this Link:http://www.exploreincometax.com/Indian-Income-tax-Act-1961/Section-48

 
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