Selling Land and Buying Apartment: Does Unregistered Agreement Count for Tax Benefit?

Ans: No, to claim exemption, amount should be invested by a person who have transferred and amount should be invested in residential HOUSE property.

Ans: No, to claim exemption, amount should be invested by a person who have transferred and amount should be invested in residential HOUSE property.

Ans: There are two main Income Tax (IT) rules in India for reinvesting the amount received after selling a property/flat to save capital gains tax:

Section 54: This is the most common option for reinvesting capital gains from the sale of a residential property.

Here's what you need to know about Section 54:

Reinvestment option: You can reinvest the entire sale proceeds in one new residential property.
Time limit: The new property must be purchased within one year before the sale or two years after the sale of the old property.
Construction option: If you plan to construct a new residential property, the construction must be completed within three years from the sale date.
Partial reinvestment: If the new property costs less than the sale proceeds, the exemption is available only for the reinvested amount. You may need to pay capital gains tax on the remaining amount.
Section 54EC: This section offers an alternative for reinvesting capital gains from any type of property, not just residential.

Here's what you need to know about Section 54EC:

Reinvestment option: Invest in specific long-term capital gains bonds issued by the National Housing Bank (NHB) or other government bodies.
Time limit: You must invest the capital gains amount within six months of the sale date.
Investment limit: There is a maximum investment limit of Rs. 50 lakh per taxpayer.
Lock-in period: The bonds come with a lock-in period of at least 3 years.
Remember:

These are just the general highlights of the two sections. It's advisable to consult a chartered accountant (CA) or tax advisor for specific guidance based on your situation.
They can help you determine which section is more suitable for you and ensure you meet all the eligibility criteria to claim the exemption.