What is the tax liability if I invest my capital gain from resale of existing flat into a under construction property

Q: I purchased a property for 40 lakhs in Jan 2013. Now I want to sell the same in Nov 2017 for 60 Lakhs. I will be investing the entire amount for purchasing a new property but the same is an under construction property and as such I would be paying for the same only as per slab completion which will take 4 years to complete. Will I be liable to pay any tax on the gains since the entire money is not getting invested in a single year?

Ramachandran ,

24th November 2017

Legal in Pune

capital gains on property

tax on short term capital gain

tax on long term capital gain

capital gain on resale of flat

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Replies (3)

Hello Ramachandaran,
Capital gains tax (CGT) is charged on the gains in the financial year in which the capital asset is transferred, but the tax is only payable in the financial year in which the money from transfer or sale proceeds are actually received by the assessee.

Aarti Bal Pathak, Pune

28th November 2017

Comment

Hello Sir,
An asset which is held for not more than 36 months or less is a short-term capital asset.
An asset that is held for more than 36 months is a long-term capital asset.
The criteria of 36 months have been reduced to 24 months in the case of immovable property being land, building, and house property.
For instance, if you sell house property after holding it for a period of 24 months, any income arising will be treated as long-term capital gain provided that property is sold after 31st March 2017.

Vatsa Suman, Pune

27th November 2017

Comment

HI Ramachandaran,
Long-term capital gain is taxable at 20% plus surcharge and education cess.
If securities transaction tax is not applicable, the short-term capital gain is added to your income tax return and the taxpayer is taxed according to his income tax slab.
If securities transaction tax is applicable, the short-term capital gain is taxable at the rate of 15% plus surcharge and education cess.

Sunil Kulkarni, Pune

27th November 2017

Comment