Query on saving Capital Gains Tax on Sale of Land

80°
Specialist
Censuresh
Moderator

a google search gives solutions as 

  1. Purchase one house within 1 year before the date of transfer or 2 years after that
  2. You should not own more than 1 residential house (other than the new one) on the date of transfer
  3. Purchasing Capital Gains Bonds

my queries are for the sale of a  vacant land in a city(not agricultural)-long term capital gain

1.Is the option to buy a house to save tax only available for the sale of 

                  a)residential land  with building 

                      b)residential vacant land as well,IF not allowed the IT rule 

.                     c) if answer to (b) is no then ,can a solution be to  construct a temporary structure like a car shed before transfer 

2. How the IT dept makes sure that there is no second house on the date of transfer especially if the properties are in different states.  Aadhaar and PAN are not included in old registrations or were not mandatory. Is there a way to find that from property taxes or otherwise?

3. Which one among the Capital gains bond is suggested for ROI, safety, and ease of operation?

TIA.





Expired
6 Comments  |  
4 Dimers
  • Sort By
Deal Subedar Deal Subedar
Link Copied

For your query no 2, how will the dept know about the other properties? The department may not know now, but in future if they come to know then they will penalise you for the same. Slow and steady every record is been computerised. So my advice is not to hide anything and always be transparent with the government or else face the consequences.

Specialist Specialist
Moderator
Link Copied

Thanks,agreed,The only option is to sell another property also to satisfy this condition

Generous Generous
Link Copied

Section 54F is applicable on property other than residential property. You need to invest sale consideration in residential property in order to avail tax benefits

https://taxguru.in/income-tax/section-54f-capit...

Section 54ec for bond purchase also applicable

Specialist Specialist
Moderator
Link Copied

https://www.incometaxindia.gov.in/_layouts/15/d...

Thanks

I saw an opinion  somewhere that  t residential land is not eligible. Also this 54F seems to have been inserted later,Thanks.


Thanks @7H4NO5; noted your suggestion of REC Bond

Deal Captain Deal Captain
Link Copied

Both the options are available for vacant land. If you are buying residential house, you have to invest entire sale consideration of land to get 100% exemption. For capital gain bonds, you need to invest only taxable capital gain amount.

You can go for REC bonds.

replyuser
Click here to reply
Reply