I have a property in Delhi. I am intending to sale a part of it and build a house on the rest of the area (by demolishing the old structure fully).
The plot was bought in 1971 & the house was built in 1985 (no proofs/receipts of expenses on construction is available with me now). My queries are:
- How will the LTCG be affected and will I get any benefits for this construction?
- What proof does the IT dept need for the new construction part(as the same builder will do both i.e. buy, register his part and construct new for the same amount, no money being given or taken)?
1 Answers
Dear Goswamy ji,
1 - If you are selling a portion of your land property, long term capital gains need to be calculated on this transaction.
2 - As you are re-investing this LTCG/sale proceeds in the construction of house, you can claim tax exemption on LTCG (if any). Kindly maintain records of all expenses related to the construction. There is no need to submit any of these documents to the IT dept.
So, primarily you need to declare the sale of property in income tax return and also can claim tax exemption on LTCG under appropriate section.
Suggest you to kindly consult a CA in this regard.
Related articles :
https://www.relakhs.com/how-to-save-capital-gains-tax-on-sale-of-land-house-property/
Please login or Register to submit your answer