I plan to buy house by selling shares. Can some income tax exemption be claimed?

I have two residential properties in my identify purchased greater than 8 years again. I am planning to buy one other residential property within the subsequent few months. I plan to fund this buy by the long run positive factors from the sale of shares on this monetary year. Will the positive factors of share sale on this monetary year be taxable or can an exemption be claimed towards buy of a residential property in subsequent monetary year in respect of capital positive factors on sale of the shares?

Answer: In respect of capital positive factors arising on sale any asset apart from a residential house, a person or an HUF can declare exemption from long run capital positive factors if the web sale consideration in respect of such asset is invested for buying a residential house inside a interval of two years after sale of such asset. Even if a residential house is bought inside one year prior to sale of such property the exemption remains to be obtainable. In case you would like to self-construct a house or e-book an below building house, you get an prolonged interval of three years to full building of the house or get possession in case it’s booked with a developer.

In case the sale consideration just isn’t totally utilised for buying the residential house by the due date of submitting of the Income Tax Return, the unutilised money has to be deposited with a financial institution below Capital Gains Account Scheme. The money so deposited can be utilised throughout the prescribed interval for fee of house.

One of the situation for being eligible for declare this exemption below Section 54F is that you shouldn’t personal multiple residential house property on the date of sale of the asset besides the one in respect of which you’re claiming the exemption. Since you already personal two homes now, you aren’t eligible to declare this exemption obtainable below Section 54F.

Balwant Jain is a tax and funding knowledgeable and may be reached on [email protected] and @jainbalwant on Twitter.


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