I purchased a flat in 2004, and another one which I will get possession of in the first quarter of 2015. I will move from the old flat to the new flat once it is ready, and then sell the old flat. I would like to minimize the capital gains tax on this transaction. How do I time the two transactions to do so?
Answered on November 08, 2017
If you invest the capital gain arising from the sale of residential flat in another residential flat then the provision of section 54 of Income Tax Act shall apply (i.e selling of one residential property and purchasing another residential property within within 1 year before or 2 years after the due date of transfer of the Property sold or construct a residential house property within a period of 3 years from the date of sale of property).
Accordingly capital gains so arising shall be exempted. Further the new residential flat so purchased should be held by you for subsequent period of 3 years. If the said condition is satisified and purchase cost of your new property is more than capital gain then entire capital gains will be exempt.
Accordingly capital gains so arising shall be exempted. Further the new residential flat so purchased should be held by you for subsequent period of 3 years. If the said condition is satisified and purchase cost of your new property is more than capital gain then entire capital gains will be exempt.
