Raghunandan P N, Bangalore
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Capital gain tax implication
Q: Dear Sir,I sold a residential property X and gained sales proceed Y. I invested the proceed Y in another residential property Z.If I wish to sell this Property Z before 3 years then I understand that I have to pay the short term capital gain tax. Is that right ?My question is whether I will be taxed only for the difference amount (Selling price – Purchased price) or will I be taxed for the whole sale proceed that I get from selling property Z.Can I reinvest the sale proceed that I get from selling property Z into another residential property to avoid capital gain tax.I am very confused, kindly help.Thanks & RegardsRaghu

Latest Answer: If the property is sold after three years of owning it, the gain will be long-term, else it will be short-term. You can avail of various tax exemptions in case of long-term capital gains, no such benefit is provided for short-term ones. As per my knowledge, you will be taxed for difference amount that is tax on short-term gain.

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