Sold Residential Plot and purchase new flat to save LTCG


I purchased a residential plot 25Lacs with three names Me, My wife, and my mother in December 2020. I paid 22L(2L cheque + 20L loan) and my mother paid 3L. I will plan to sell it on 49L in March 2024.
I am purchasing a new property now with 49.5L with a home loan of 43L with named my and my wife, How can I save my Long-term Capital gain tax by other investments (Bond/agriculture land)? How many amount needs to be invested by an individual?

Thank you,

Hey @jignesh.patel47,

You can claim an exemption under Section 54F by investing the gains in a residential house property.

You can also invest in NHAI/REC Bonds and claim an exemption under section 54EC.

Hope this helps!

Thank you Surbhi getting me clear. I just want some details.

  1. My previous property was a residential plot. Do I need to invest the full amount in the NHAI/REC bond to just Capital gain only?
  2. Is it required to divide invest as It was invested in Plot by a member OR It is required to invest all three members equally?

Thank you,
Jignesh Patel

Hey @jignesh.patel47,

When you invest in NHAI/REC bonds, exemption u/s 54EC is available on capital gains or the cost of the new asset, whichever is lower. Therefore, in your case, you can invest the entire amount of LTCG to claim an exemption.

Moreover, the initial investment in the plot was made by you and your mother. The capital gains will be divided in the proportion of your investment between you and your mother. Hence, in order to claim the benefit of exemption under section 54F or 54EC, the respective individual has to make their own investment.

Thank you very much @Surbhi_Pal , this is very clear to me.
As Calculation I understand,
Cost aquition of plot 27L = Purchase price 25L + 1.5L(stamp) + 0.5L(Transfer fee) (Purchase date : 10 Nov 2020)
Capital gain calculator indexation = 27L * (331 / 301) = 29.69L
Capital gain 49L - 29.69L = 19.31L
As per investment percentage mine is 92% and 8% is mother’s.
So As per 8%, a mother can invest in bond/property 19.31*8/100=1.55L
I can invest 19.31×92÷100=17.77L in bond/property/repayment of a home loan I just bought.

Please help me to understand the calculation, Do I calculate right?

Thank you,
Jignesh Patel

Hey @jignesh.patel47,

We can only help you understand the provisions of the Income Tax Act.

For personalized assistance, you can book a MEET using the below link, wherein one of our tax experts will understand the situation and do the calculations for you.

You can apply the following coupon code the book the meeting at just ₹99/-. The offer is valid only till 15th December 2023.
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