Your Queries (Income Tax): Tax exemption on gain on plot sale if reinvested in new house within 2 years

Nevertheless, the full funding within the monetary 12 months and the next monetary 12 months might be as much as Rs 50 lakh.

By Chirag Nangia

I’ve bought a small plot belonging to my father. I wish to reinvest the cash in a small flat. How a lot time do I’ve to take action or ought to I put this cash in a authorities bond?

We’re assuming that the plot/ land transferred by you was a long-term capital asset (i.e. held for a interval greater than two years instantly previous the date of switch). Any acquire on sale of a plot of land might be claimed as exempt below Part 54F, if web consideration is invested in buy of 1 residential home property. The brand new home property must be bought inside one 12 months earlier than or two years after the date of switch of capital asset or constructed inside a interval of three years after the date of switch.

If by the point of submitting of ITR for the related evaluation 12 months, the online consideration/ a part of it can’t be appropriated in direction of buy of a brand new home, then such quantity could also be deposited within the Capital Achieve Account Scheme (CGAS).

Then, the cumulative quantity of the funding and deposit in CGAS is allowed as a deduction from resultant capital beneficial properties. The quantity stored in CGAS must be utilised inside the cut-off dates specified above, else unutilised quantity could be handled as capital beneficial properties, proportionately, within the 12 months during which the interval expires. All the small print pertaining to funding in new property/ CGAS, utilization from CGAS need to be furnished within the Earnings Tax Return type.

Alternatively, the long-term capital beneficial properties on sale of plot, could also be invested in bonds of RECL/NHAI, inside a interval of six months from the date of switch of asset to say exemption below Part 54EC. Nevertheless, the full funding within the monetary 12 months and the next monetary 12 months might be as much as Rs 50 lakh.

I’m a pupil and have earned income of Rs 50,000 from buying and selling in shares up to now six months. Do I’ve to file ITR and in that case what type?
—Manipal Mithun
Compulsorily ITR submitting is just when gross whole earnings of the earlier 12 months exceeds the essential exemption restrict of Rs 2.5 lakh for a person beneath 60 years. In case your whole earnings is just Rs 50,000, you aren’t obligated to file an ITR. Nevertheless, you might file a return on a voluntary foundation. Since you’ve gotten been buying and selling in shares, the resultant earnings should be disclosed below head ‘income and beneficial properties from enterprise and occupation’ in ITR Kind 3, for AY 2021-22.

The author is director, Nangia Andersen India. Ship your queries to fepersonalfinance@expressindia.com