I am a follower of your blogs for long periods and find it helpful.
I have sold my only house owned by me on 30th january 2020 for Rs 23 Lakhs. Towards brokerage I paid Rs 54k to an agent. I had bought that house for Rs 3.6 Lakhs on 10th May 2005. Now I have invested the entire selling amount in booking a new residential flat under construction and paid the CV in advance before 30th June 2020. I am working in a company and fall in the 10% tax bracket.
Kindly guide me whether I need to show this in my tax returns? What would be my tax liability?
You can claim tax exemption on your gains.
For tax calculations, suggest you to kindly consult a CA.
You can show this transaction in ITR-2 form under Capital gains and can also claim exemption u/s 54.
How to save Capital Gains Tax by claiming Exemption u/s Section 54? (Applicable to LTCG on sale of house property only)
You can use the entire Long Term Capital Gain proceeds on sale of a residential house to buy another house property (residential property) to save Capital Gains tax. Below conditions need to be satisfied though;
- The new house has to be bought one year before (under-construction property) the transfer of the first house or within two years after the sale. (For an Under construction property or flat , the construction has to be completed within three years of the transfer of the first property.)
- The deduction allowed is equal to the actual investment or the capital gain, whichever is lower.
- If you plan to use the gain to build a house, it has to be done within three years of the sale of the property. Do note that ‘cost of land’ can be included in the construction cost.
Related article :
How to save Capital Gains Tax on Sale of Land / House Property?
Thanks for your prompt reply and guidance.
Would be grateful if you advice on my tax liability on the current selling amount I.e. 23 Lakhs. I have invested the full amounts to the new house within 6 months. Do I have to pay any tax? The transaction didn’t reflect in form 26A also.
Please tell me as I do not want to file a wrong return? How much tax I need to pay now before filling the return?
Jai Hind. Namaskaar.