No rollover exemption is given on short-term capital positive aspects

In 2019, I offered a residential plot that I had bought in 2006. The whole positive aspects from the sale had been reinvested in a residential flat I bought in 2020. I need to promote this flat as quickly as potential. What would be the tax on capital positive aspects, and may I save tax by reinvesting earnings once more in a special property?

—Name withheld on request

We have assumed that capital positive aspects arising from the sale of the residential plot was claimed exempt from tax below Section 54F of the Income Tax Act.

As per provisions of Section 54F, the place the brand new asset, i.e. flat bought in 2020, is transferred by you after a interval of two years from the date of its buy, the quantity of capital achieve can be chargeable to tax as long-term capital positive aspects (LTCG) within the tax yr wherein it’s transferred, and also you would wish to discharge the relevant revenue tax on the identical accordingly. Tax exemption on capital positive aspects might be sought in any of the next methods: by investing the LTCG in a brand new residential home located in India; by investing LTCG in specified bonds or by investing internet consideration in fairness shares of an eligible startup. If the flat is offered inside 24 months from the acquisition date, capital positive aspects from the sale can be taxable as short-term capital positive aspects at relevant slab charges (as elevated by surcharge, if relevant, and schooling cess). No rollover exemption is on the market towards STCG.

I’ve a public provident fund (PPF) account with the Central Bank of India since 2000. I prolonged it for 5 years, which resulted in March 2020. Due to covid restrictions, I couldn’t prolong it for an additional 5 years earlier than March, however need to do it now. Can I prolong this PPF account for an additional 5 years? If sure, what’s the course of? If no, can I maintain the gathered surplus in my present PPF account and earn curiosity with out contributing? Or will I’ve to shut and withdraw all the cash?

—Ingrid Ferrao

Considering the covid-19 scenario, we advise that you just examine along with your financial institution for any waivers or extensions on time period of PPF accounts. Further, as per the provisions of the PPF scheme, on completion of any block interval of 5 years, the PPF account holder could proceed to carry the account with out additional deposits and the account shall proceed to earn curiosity until it’s closed.

Parizad Sirwalla is companion and head, international mobility companies, tax, KPMG in India.

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