Dear Mihir I have sold a residential property in Feb.2023 and have capital gain of about 15.00 lakh. To construct new house, I have already bought residential plot costing 9.00 lakh and sale deed registered in May,2023. The cost of Plot was meet out from the sale proceed of the residential property sold in Feb.23. Kindly advise whether I have to kept Rs.6.00 lakh (i.e.Gain15.00 lakh minus 9.00 lakh cost of Plot) in Capital Gain Account Scheme for the construction of House OR I have to kept whole money of Capital Gain i.e. Rs.15.00 lakh in the CGAS. How much Amount I have to show in the IT Return for AY 2023-2024.

Ans: Hello,

I understand your situation and I'm here to help. Based on the details you've provided and the current tax laws in India, here's what you need to know:

1) The amount you've spent on acquiring the housing plot can indeed be considered for the utilization of your capital gain. As per the Income Tax Act, if you reinvest the capital gains from the sale of a property in buying a new property or constructing a new house, you can claim tax exemption on the capital gains.

2) The amount you need to keep in the Capital Gain Account Scheme (CGAS) would be the remaining amount after deducting the cost of the plot from the capital gain. In your case, if you've already spent Rs. 11.00 Lakh on the plot, you would need to keep Rs. 4.00 Lakh (Rs. 15.00 Lakh - Rs. 11.00 Lakh) in the CGAS. This amount should be utilized for the construction of the house within the specified time period, which is 3 years from the date of sale of the original property.

Ans: As per the provisions of the Income Tax Act in India, if you have made a capital gain from the sale of a residential property and wish to claim exemption under Section 54F by investing in a new residential property, the following rules apply:

- You can claim exemption on the capital gains if you invest the entire amount of capital gains in a new residential property. In your case, the total capital gain is Rs. 15.00 lakh, and you have utilized Rs. 9.00 lakh to purchase the residential plot. To claim the exemption, you must utilize the entire Rs. 15.00 lakh amount for the construction of the new house.

- If you are unable to invest the entire capital gains amount before the due date of filing your income tax return (usually July 31st of the assessment year), you can deposit the unutilized amount in a Capital Gain Account Scheme (CGAS) before the due date to claim the exemption. In your case, if you haven't utilized the entire Rs. 15.00 lakh for purchasing the residential plot and construction has not yet begun, you must deposit the unutilized amount of Rs. 6.00 lakh in the CGAS.

- In your Income Tax Return for AY 2023-2024, you need to show the capital gains from the sale of the residential property, which is Rs. 15.00 lakh, and then claim the exemption under Section 54F for the amount utilized to purchase the residential plot and construct the new house (i.e., Rs. 9.00 lakh). Additionally, you should mention that the remaining Rs. 6.00 lakh is deposited in the CGAS for the purpose of constructing the new house to claim the complete exemption.

Please note that to avail of the exemption under Section 54F, you need to fulfill all the conditions mentioned in the section, such as not owning more than one residential house (excluding the new one) on the date of transfer of the original property and not purchasing any other residential property within a specified time frame.

Ans: 01. You can deposit Capital gain amount in Capital Gain Account Scheme with any Public Sector Bank, on or before the last date of filling of your ITR. In your case it shall be JULY-2025.
02. You may book a property (Constructed Residential House) worth Rs.40.00 lakhs, BUT it should be transferred in your name with in a period of 2 years from the date of sale of Property.
03. In absence of information about the Sale Value of property, please note that your exemption shall be limited to Rs.40.00 lakhs (amount Invested).
Most welcome for any further clarifications. Thanks.