I had bought a commercial property in August 2013 and am selling it in July 2017. After apply indexation and making appropriate deductions I have an amount of Rs. 31 Lakhs as long term capital gains. I plan to reinvest it (immidiately) along with my initial investment as a part of payment to buy a residential house worth 2.5 crores. The project in which I plan to buy a house is an under construction one and I am supposed to get possesion by June 2020.
I now have the following questions
1. If I buy a residential property with this amount of Rs. 31 Lakhs (& the initial investment), can I prevent / exempt myself from tax liability ? If so then under what Section of the Income Tax Act ?
2. If not then what other options do I have to reduce my tax liability ?
3. How much tax (in %) would be applicable on this amount if I do not happen to reinvest the LTC Gains amount back ?
