SANJAY SINGH 06 October 2023

Query from direct tax law on the issue of long term capital gain from the sale of immovable property

I sold a house property in August, 2021 and deposited the long term capital gain in CGAS ACCOUNT maintained SBI BANK in July 2022. My query is that can I use all amount in purchase of plot and then construction will be finished by July 2024 i.e. within three years.

Else can I use half amount of Long term capital gain for purchase of plot and half amount of that for construction on that. Please convey me in this regard what is the correct law with regard to use of long term capital gain in respect of purchase of plot and construction on that to save the taX on LTCG.

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4 Replies

Isaac Gabriel (Advocate) 06 October 2023

You should invest the capital gain within three years in purchasing immovable propert from the date of sale, you will have to pay the tax.

T. Kalaiselvan, Advocate (Advocate) 07 October 2023

Ensure that you utilise the amount deposited in capital gains account within 2 years of sale of property to avail the benefits under Sections 54, 54EC and 54F. If this is not done, the unutilised amount will be subject to capital gains tax in the fiscal in which the deadline ends.