• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

T. Banusekar

I PURCHASED a plot of land a few years ago. The value of the plot has increased over time. I do not like the location of the site and, therefore, I plan to sell this and buy another one.

I am told that I cannot get any exemption on sale of a plot and reinvestment in another plot. Kindly advise.

P. M. Nagappa

Reply

You have been advised correctly in that no exemption from capital gains is available on the sale of a plot and on reinvestment in another.

Exemption is available under Section 54F on sale of a long-term capital asset and on reinvestment in a residential house subject to satisfying the conditions in that section.

If the reinvestment is in a plot of land and if a residential house is constructed on such plot of land within three years from the sale of the original plot, the exemption can be claimed under this section subject to satisfying the other conditions in the section.

Exemption can also be claimed on reinvestment in bonds of Nabard, National Highway Authority of India, SIDBI, Rural Electrification Corporation or National Housing Bank. This exemption is available under Section 54EC subject to satisfying the conditions in that section.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Trends in mutual fund flows — Is shift to equities sustainable?

Copyright © 2005, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line