I plan to purchase home by promoting shares. Can some earnings tax exemption be claimed?

I’ve two residential properties in my title purchased greater than 8 years again. I’m planning to buy one other residential property within the subsequent few months. I plan to fund this buy by the long run features from the sale of shares on this monetary yr. Will the features of share sale on this monetary yr be taxable or can an exemption be claimed in opposition to buy of a residential property in subsequent monetary yr in respect of capital features on sale of the shares?

Answer: In respect of capital features arising on sale any asset apart from a residential home, a person or an HUF can declare exemption from long run capital features if the online sale consideration in respect of such asset is invested for buying a residential home inside a interval of two years after sale of such asset. Even if a residential home is bought inside one yr previous to sale of such property the exemption continues to be out there. In case you want to self-construct a home or ebook an underneath building home, you get an prolonged interval of three years to finish building of the home 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 home by the due date of submitting of the Income Tax Return, the unutilised cash must be deposited with a financial institution underneath Capital Gains Account Scheme. The cash so deposited may be utilised inside the prescribed interval for fee of home.

One of the situation for being eligible for declare this exemption underneath Section 54F is that you shouldn’t personal multiple residential home property on the date of sale of the asset besides the one in respect of which you might be claiming the exemption. Since you already personal two homes now, you aren’t eligible to assert this exemption out there underneath Section 54F.

Balwant Jain is a tax and funding skilled and may be reached on jainbalwant@gmail.com and @jainbalwant on Twitter.

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