On capital gain tax on sale of inherited property.?

Capital gain tax is likely to occur to me in January 2012 from the sale of inherited property, To save this tax I need to buy another residential property, I am getting a cheaper property now this month, So can I purchase the property now from my own savings and save the capital gain tax occuring to me in Jan 2012 on sale of inherited property.

2 Replies to “On capital gain tax on sale of inherited property.?”

  1. Yup..you can buy the new property anytime within 1 yr before sale or 3 year after sale. so you will be entitled to exemption even if you purchase the property now.

  2. ha ha three in one question…….first -to avoid long term capital gain (LTCG) you have many option other then the buying a new property, so if you do not want to buy new property then invest in invested in specified bonds.
    These include bonds issued by the National Highways Authority of India (NHAI), the Rural Electrification Corporation (REC), Small Industries Development Bank of India (SIDBI), National Housing Bank (NHB) or National Bank of Agricultural and Rural Development (NABARD).

    Capital Gains Scheme of Deposit Account (CGSDA) (Also sometimes known as Escrow Account)

    Second- buy it from the fund from sales here You will not only save TAX on LTCG and you will get benefit of repayment of loan.

    Third is already answered. but you need to remember that There is one more condition for saving the income tax under section 54: The new house that is purchased has to be held for at least 3 years from the date of purchase, or from the date of completion of its construction.
    This clause is very important, because if you do not follow this, you would undo all the benefit that you received through section 54.
    What happens if this condition of holding the new house for 3 years is not satisfied?
    When you sell this new house, while calculating the capital gain on its sale, the cost of this house will be reduced by the amount of long term capital gain (LTCG) that you invested in this house.

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