Assessees can get an exemption by investing long term capital gains from the sale of house property in up to two house properties against the earlier provision of investment in one house property with same conditions. However, the capital gains on the sale of house property must not exceed Rs 2 crores.

The taxpayer has to invest the amount of capital gains and not the entire sale proceeds. If the purchase price of the new property is higher than the amount of capital gains, the exemption shall be limited to the total capital gain on sale.

Conditions for availing this benefit

1. The new property can be purchased either 1 year before the sale or 2 years after the sale of the property.

2. The gains can also be invested in the construction of a property, but construction must be completed within three years from the date of sale.

Exemption under Section 54F is available when there are capital gains from the sale of a long-term asset other than a house property. You must invest the entire sale consideration and not only capital gain to buy a new residential house property to claim this exemption. Purchase the new property either one year before the sale or 2 years after the sale of the property. You can also use the gains to invest in the construction of a property. However, the construction must be completed within 3 years from the date of sale.

1. 100% LTCG can be claimed in the following isolated or multiple circumstances, within time limit of 2/3 years:

a) Ready to move property, within 2 years, of sale of earlier property.

b) New /Under construction Flat/House on ownership plot, within 3 years, of sale of earlier property.

2. BOTH above can be claimed together, to the extent of Capital Gains amount, which in your case would be exempt entirely, provided entire LTCG is invested in above manner/s.

You can avoid paying the tax if you are reinvesting the amount in another  property within 2 years or 3 years if it is being constructed from the date of transfer of the property. You can also invest in bonds as notified under Section 54EC of the Income Tax Act. Up to Rs.50 lakhs can be invested in these bonds. If the gain is not utilised to buy another property or to invest in bonds, then it must be deposited in the Capital Gains Account scheme before filing your returns. 

Capital gain is payable on the property based on the indexed value of appreciation in this case the property you are buying is is going to be registered in 2023 so it is not covered under capital gain exemption and you will be liable to pay entire capital gain tax liability in the year 2021 if you sell the property in 2020 the capital gain proceeds can be exempted only e if you purchase a property one year of sale or  purchase any property within 2 years from the date of sale of the property and using entire capital gain for purchase construction are acquiring any new property long term capital gain is taxed @ 10% plus surcharge of 3%

Since you are selling flat after holding it for more than 20 years it would attract long term capital gains  you are liable to pay 20 per cent capital gains tax after indexation 

2) Long term capital gain is calculated as the difference between net sales consideration and indexed cost of property. The benefit of indexation is allowed to set off the impact of inflation from the gains made on sale of the property so that the actual gains on propertywill be taxed.

3)The new residential property must be purchased either 1 year before the sale or 2 years after the sale of the property/asset.

the new residential house property must be constructed within 3 years of sale of the property

Hi

Yes you can utilize the funds for construction. 

That should neutralize the tax matter.

Dear Sir,

The following information may kindly be read;

Yes you may get the benefit for capital gain on purchase of the house based on the agreement of sale. Further the calculation of capital gain would be based on Indexation so your CA.may help you with same.

Yes you can use for same construction should complete in 3 years.

Yes you can use for same construction should complete in 3 years.

To save LTCGT, purchase of under constructed flat with in 3 years post sale and not before sale.

To claim exemption of LTCGT, construct the house on your land.

Use the below mentioned formula

Short-term capital gain= full value consideration – (cost of acquisition + cost of improvement + cost of transfer).

Long-term capital gain = full value of consideration received or accruing – (indexed cost of acquisition + indexed cost of improvement + cost of transfer

1. Long term capital gain tax of 20% will be applicable on around 95 lacs.

2. If you build house on this plot than you can claim exemption of tax over construction cost.