Can capital gains tax be avoided by selling existing property?



New property under construction has been aquired by Mr.X, he has an exisiting property. Can he sell the exisiting proerty within one year of aquision of the new property under construction to avoid capital gain tax?

Can capital gains tax be avoided by selling existing property?
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2 Replies to “Can capital gains tax be avoided by selling existing property?”

  1. I presume this in Indian context and it is a residential property. If so, yes, under section 54 of the Income tax Act 1961, provided the cost of acquisition of new property is more than the capital gains made by selling the existing property. The cost of construction before the date of selling the existing house will be ignored for this purpose. Only the cost of construction after the date of selling will be recognised.


  2. yes but the existing property should be atleast 3 years old. also ensure payments to builder before 1 year from date of acquisition to the extent of capital gains attributable





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