I have bought a house for 27 Lacs in year 2013-2014, I sold it at 1.58cr in year 2022-2023, then I bought a house for 1.12cr in year 2022-2023, let me know if I sell the house at 1.20cr, will this attract capital gain tax?

Ans: Your long term capital gains (LTCG) would need to be calculated based on your indexed cost of acquisition of plot, construction and any improvements or alterations done by you of a permanent nature. For doing this, your original costs, inflated by the CII (Cost Inflation Index) as given out by the Govt from time to time is to be used.

The current CII is available from 2001 onwards, while your purchases relate to much earlier. There are ways of handling this including a valuation to be done by a competent professional.

I would recommend you to approach a Govt certified valuer or a CA to evaluate the LTCG in this case.

Ans: Hi,

I am presuming that you want to clarify if the capital gain tax be avoided if the reinvestment of old 1BHK flat sale could be mapped against purchase of 2 BHK flat.

The reinvestment conditions specify that you could off-set the capital gain arising out of sale of a residential property by purchasing or constructing a new house within the stipulated timeframes.

If you have bought a ready possession property (new flat) then the timelines are 1 year back or 2 years forward from the date of sale of the old flat.

If you have bought an under construction flat then the timelines are 3 years forward from the date of sale of the old property.

An example would be as follows:

Purchase of 2BHK flat is say June 1, 2022 and date of sale of 1BHK is say May 1, 2023 - You could map the capital gains from 1BHK against the purchase of 2BHK ready possession flat. Similarly, if the purchase of the 2BHK flat was at anytime after May 1, 2023 but within 2 years from this date, then again the exemption would be allowed.

In the case of under construction property, all payments made to the builder after May 1, 2023 would be allowed upto a period of 3 years

Ans: Hi Alok
Buying a plot is not considered as reinvestment and eligibility is on buying or constructing a residential house.

In this case if you construct a house on the plot then you could map the capital gains from the sale of the ancestral house against the cost of construction of the house on the plot.

Also, as you have sold the house in March 2023, you would need to open a Capital Gain Accounts Scheme (CGAS) account with any nationalized bank on or before the due date for filing your tax return. The deposit of the capital gain amount in the CGAS account would be treated as reinvestment for the moment.

You need to note that this CGAS account amount has to be utilized for construction within 3 years from the date of sale of the ancestral house.

In case you are not depositing the amount in CGAS account or reinvesting in any eligible assets before filing tax return (of course before due date) then you would need to pay tax on the capital gain portion