Income From Sale Of Property As Capital Gain For ITR

I have sold a house for INR 70 lakhs. The entire amount I received, I have given to my daughter to purchase a house. I would like to know whether I have to pay capital gain tax or not.

Answer (1)

Mohim Roy

  • Sector-1, Noida

When you sit down to file your income tax return (ITR), Form 16 issued by your employer may not be the only document you need. The income from selling capital assets, house property and interest on deposits needs to be disclosed in your ITR form. Concealing or misreporting income from these sources is a sure-shot invitation to a tax notice. Tax authorities are tightening the noose around tax offenders. 

Section 54F of the Income Tax Act states that long-term capital gain from the sale of house property can be claimed as a tax exemption in the following cases:

  1. A new residential house property must be purchased or constructed to claim the exemption.
  2. The new residential property must be purchased either 1 year before the sale or 2 years after the sale of the property/asset.
  3. Or the new residential house property must be constructed within 3 years of sale of the property/asset
  4. If you are not able to invest the specified amount in the manner stated above before the date of tax filing or 1 year from the date of sale, whichever is earlier, deposit the specified amount in a public sector bank (or other banks as per the Capital Gains Account Scheme, 1988).
  5. Only one house property can be purchased or constructed.
  6. Starting FY 2014-15 it is mandatory that this new residential property must be situated in India. The exemption shall not be available for properties bought or constructed outside India to claim this exemption.

Answered on 07 Aug 2019


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