Tax On Long-Term Capital Gains Slashed If Invested In
Residential House Property
Yes, the investment in a residential house property also plays a key role in saving long-term capital gains. This aspect is of particularly great importance and practical use for all those persons who are interested to save income tax in respect of the long-term capital gains arising to them.
As per the provisions of Section 54F of the
Income Tax Act, 1961, it is possible for any individual so also for the HUF to
save income tax in respect of long-term capital gains arising to them from any
capital assets other than the residential immovable property.
Thus, if you are selling either your shares
or mutual funds or jewellery or commercial property or land and you are
deriving long-term capital gain, then it is legally possible for you to cut
down your payment of income tax on the long-term capital gains derived by you
by selling either the shares or the bonds of mutual fund or even your jewellery
or the commercial property.
Those who are interested to take advantage
of this provision should ensure that such persons should not own more than one
residential house property in their own name. Thus, if you are owning already
one residential house property then also it is possible for you to save
complete income on long-term capital gains on selling your movable assets
provided you just make the investment equity net sale proceeds within 3 years
from the date of sale in constructing a new residential house property.
If you are not interested to make
investment in the construction of your sweet residential house property then
you may even go in for buying readymade apartment, villa or a flat or a floor.
The readymade house property has to be purchased by you within two years of the
date of sale of other capital assets like shares, mutual funds or jewellery,
etc. It can be purchased one year in advance also. Thus, it is legally possible
for you to cut down your payment of tax on long-term capital gain if you make
investment in residential house property.