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Investing sale proceeds of residential flat in buying a commercial shop? |
I had purchased a flat in pune on 8/05/1989 for Rs.1,10,000 and I sold the same flat on 11/04/2006 for Rs.12,00,000.I paid Rs.20,000 brokerage for this transction. Insteed of buying a new small flat for me can I buy a small shop for me worth Rs.15,00,000 utilizing the total net consideration of the above flat without involving into any type of taxes? Please enlighten me in the matter. No, Only investment in residential flat and not any shop is allowed for the purpose of exemption from Capital Gains u/s54 of the I T Act. Please consider , and this is also related to our earlier question regarding the best option for you to save taxes . following option 1. Invest in some residential flat with a view to sell it after three years. You will get exemption from Capital Gains, you will get Indexation benefits when you will compute the capital gains on the flat sale and mind you the most permanent appreciation in growing India is Real Estate in India right now. So overall you will get highest return from your investment. Moreover, if you also take loans for purchase of flat , that will further reduce your liability to tax for three years. 2. Keep the amount of capital gains in Capital Inc\vestment bond and as per law if you do not invest it withing next two years from the date of transfer, the amount will be the capital gain in the year in which such three years from the date of transfer of the flat completes. Thus you are only forwarding your tax liability by some years. 3. Pay the tax.and be in peace! |
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