Property Sale Windfall: Taxes, Investments, and Black Money Advice for 8 Crore Profit

Ans: Assuming sales consideration is 22 crs then you will get the exemption to the extent of 1/22.

Ans: An individual or HUF selling a residential property can avail tax exemptions from Capital Gains if the capital gains are invested in purchase or construction of residential property.

Ans: Hello;

1. You have 2 options of long term capital gain tax working because you have old land.
a.200-1=199 Lakhs on this a tax of 12.5% i.e.24.875 Lakhs
b.200-x=xyz Lakhs on this a tax of 20%
Where "x" is the inflation indexed cost of acquisition
You may consult a CA for calculating "x" for you and also recommending ways in which you can avoid payment of this tax based on provisions of income tax act.

If you can save on entire tax payment by reinvesting the capital gain from land sale into real estate then it makes sense to invest in real estate. You may rent out part of your real estate to earn rental income.

You may do a monthly sip of `90 K in an equity savings type mutual fund with low to moderate risk for 7 years.

It may grow into a sum of 1 Cr after 7 years assuming modest return of 9%. It may be utilised to fund higher education of your kid and partially funding your retirement income in addition to rental income.

Best Wishes;
X: @mars_invest