Capital Gains Tax on Property

My mother, aged 76, a bonafide cancer patient and currently bed ridden, has sold a residential property.

In what time frame, another ready built property can be purchased, so as to avoid taxes?

Further, in case of her unfortunate demise, without investing in another property, what will be the consequences? Can my Father then make this investment, within this time frame?

What are other options? more  

View all 7 comments Below 7 comments
What happens to NRI card Holder??. When & How can he/she sell the house if he/she wants to take all the money into foriegn currency. Is it possible?? or He/She needs to pay CGT???. Please answer. more  
Income tax rules for NRIs are similar to that for Residents. She will need to pay tax @20% Or purchase property Or invest in specified capital gain bonds. NRIs are not exempted from payment of tax on capital gains.. more  
I thought One can deposit all the amout from Sale of House into number of specified ,Taxfree Bonds or into Capital Gains Tax Exemption Trust Account in the Nationalised Banks for 3 years & then you can withdraw without any Income Tax......Is that right????? .Please answer. more  
The ready built house is required to be purchased within two years of Sale of the property or deposit the amount of capital gain in the capital gain bonds of companies notified by the government in this regard.. The legal heirs can neither purchase new property nor capital gain bonds to save payment of income tax as there is no such express provision in the Income Tax Act. So it is very important to Consult an experienced Tax consultant in this regard. more  
Sorry to hear about your mother's illness. May God give her strength to recover. Now, coming to the legal issue, attention is invited to section 54 of Income tax Act which provides that if capital gains arising from transfer of residential house is used to purchased another residential building either one year before or two years after date of sale, or constructed within three years of sale, then the capital gains arising is exempt to the extent of amount of capital gains do used. Pending utilisation, you have to deposit the amount of capital gains in a capital gains account with a bank before the due date of filing return . You can withdraw money from this account and appropriate it towards new property within time permitted in this behalf. In the unfortunate event of demise of your mother prior to acquisition of house , in my opinion, the legal heir/ successor/ representative can buy the house and claim deduction because section 259 of the Act provides that where a person dies the legal representative shall be liable to pay tax in the same manner and extent as the deceased person. The necessary implication of this is that even the LR is subject to the same rigours as the deceased then he ought to get all the exemptions as would be available to the deceased . Another option to avoid tax is investing in binds under section 54EC. more  
Thanks a lot for the information, dexterously explained. more  
a. The law is that if you want to reinvest in the entire capital gain in a residential property, you have to do so in ready built house either before 1 year or after 2 yours of sale of old house or if you want to construct a new house, you have to do it within 3 years from the sale of old property.
But if you do not invest in above, before the due date of filing of your IT return, you have to deposit the entire amount in a Capital gain Deposit scheme in any Nationalized Bank without fail.
You had another option of investing in specified bonds upto Rs.50.00 lakhs out of your capital gain and the rest you can invest in property or pay tax.

b. In case of demise of your mother, if entire capital gain amount is deposited in Capital gain scheme by her before death can be withdrawn by her legal heirs without payment of any Tax as the liability for non investment of proceeds in a residential house ceases on her death more  
Post a Comment

Related Posts

    • Received a fake INR 2000 Currency from HDFC Bank ATM

      Dear All, after shifting to Mumbai temporarily in March, I received a fake INR 2000 currency note from an HDFC bank ATM in the Govandi area in Mumbai on May 1, 2019. I realized about it after 3-4 ...

      By Kunwar Rajeev Singh
      /
    • M/s.Shopclues.com CEO issued a NBW by Secunderabad Criminal Courts for offences Punishable U/s.420

      Dear Readers and leagal experts, A case has been filed in the local magistrates court at Secunderabad against M/s.Shopclues.Com for offences punishable under section 420 for cheating. I had p...

      By Anil Kumar Singh
      /
    • can a appeal be file again against order of if the case is dismissed again by Hon'ble Supreme court?

      Sir, A Complaint case was filed by a women against an advocate praticing at Tis Hazari court in 2015 after 21 months of the incident happened in 2013. Police filed FIR and advocate filed a Complain...

      By Iqbal Singh
      /
    • Indian Legal System

      Need urgent advise from all my respected legal eagle friends in this group regarding the following: 1) Can a judge of the HC admit a case simply on the basis of it being a matter of an e...

      By VIKAS BHAKRI
      /
    • Motor Insurance Renewal w/o my knowledge by new owner under my name

      I sold my car in Jan 2017 to a dealership in Noida Sector-8 for an exchange value when buying a new vehicle. After 2.9 years of this transaction, I received a motor insurance certificate at my addr...

      By Akhil P Walia
      /
    • Need help/Suggestion

      I am buying a running restaurant from individual. Paying him a heavy refundable deposit and also a small amount every month as royalty for the business. Shop owner is different with whom I will do ...

      By Ashutosh Jajodia
      /
    • Consumer protection

      Rs. 875/- paid to Amazon.pay for Airtel postpaid bill on 08th sept.2019 has not been credited by Biller resulting in default requiring another payment if Rs.875/- ?? Amazon need to compensate ...

      By Surrender Singal
      /
    • Advocate help required in NCDRC against builder jaypee.

      Advocate required for fighting case in NCDRC against jaypee builder on behalf of association for a very clear case of deficiency in service and extortion in the name of maintenance charges. We have...

      By Pravesh Saini
      /
    • Re registration of 15+ years old vehicles

      What is the legal position on re registration of more than 15 years old vehicles. Is it compulsory to re register the vehicle after 15 years in case there is no plan to use it? If the veh...

      By Mustafa P V
      /
    • Legal Advice on Property BuyBack Agreement & Mou

      Hi, Would anyone here will be able to help with the draft or guidance on property buyback agreement & mou offered by a real estate developer to an investor. Thanks

      By Anonymous Circle member
      /
    • Advice needed

      There is one apartment having 5 flat owners . Out of 5 , three flat owners have occupied their flats . Recently , One flat owner on first floor might have given his flat on Rent to three boys as th...

      By Mahen Patle
      /
Share To
Enter your email & mobile number and we will send you the instructions

Note - The email can sometime gets delivered to the spam folder, so the instruction will be send to your mobile as well

Please select a Circle that you want people to invite to.
Invite to
(Maximum 500 email ids allowed.)