Income tax guidelines on sale of second home defined

Whether long run capital beneficial properties exemption is relevant for the transactions of sale of second house/third house or it is just relevant on the market of first house? 

Answer: I perceive you might be speaking about exemption obtainable below Section 54 of the Income Tax Act. This exemption is out there in respect of long-term capital beneficial properties arising on sale of a residential home held for twenty-four months or extra if such long run capital beneficial properties are invested for buy/building of one other residential home in India inside specified time. 

There aren’t any restrictions as to the variety of instances you possibly can avail this tax profit so long as the long run capital beneficial properties on sale of 1 home are invested in one other home. You can declare this exemption even in respect of a couple of home bought throughout the 12 months offered you fulfill the essential situations. 

You can even declare this exemption in respect of a couple of residential home by investing the long run capital beneficial properties in a single home in India. In case capital beneficial properties arising on sale of a residential home are invested for buy or building of a couple of residential home, you’re going to get the profit solely in respect of capital beneficial properties invested in a single home solely. However, one can avail as soon as in a life time alternative to assert exemption from long run capital beneficial properties on sale of 1 residential home by investing the identical in two residential home property offered the quantity of such long run capital beneficial properties don’t exceed two crore rupees. Moreover, there is no such thing as a restriction as to the variety of homes, which you’ll be able to personal on the date of sale of the residential home property to assert exemption below this part.

Balwant Jain is a tax and funding knowledgeable and be reached on [email protected] and at @jainbalwant on his twitter deal with.

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