I had sold 3 BHK flat in Sept,2015 and invested the sale proceeds in purchasing a flat in March,2016. this year in March,2023 I sold an ancestral flat purchased by my father in August,2007 and acquired by me through family arrangement and purchased a plot out of entire sale proceeds with intention to construct a house thereon. Pl let me know " will I have to pay tax on capital gain amount".
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