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Author Topic: Property sale in Mumbai and new property purchase in UAE  (Read 758 times)

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Offline nabeels

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Property sale in Mumbai and new property purchase in UAE
« on: April 11, 2016, 06:22:39 AM »
I have a property in India worth 4.5cr . The property was purchased 9 years back at a value of 46 lakhs. I am planning to sell this property and buy a property in UAE. Is it possible to save the LTCG if I show that the I have purchased a property within 1 year in UAE? Or does the rule says that I need to buy property in India only. Please advise

Offline rajgopal sripathi

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Re: Property sale in Mumbai and new property purchase in UAE
« Reply #1 on: April 11, 2016, 07:51:14 AM »
To save yourself from LTCG, you need to buy a property in India only.

Under section 54 EC of the Indian Income Tax Act, you can invest part of sale proceeds in certain bonds. Additional conditions to be met include that the asset must have been held long term, whole or part of the gain must be invested within six months from the date the transaction is completed subject to a maximum limit of Rs. 50 lakh per financial year. These funds will be locked in for a period of three years and if converted into money within this period, the exempt gain will become taxable. Loans cannot be obtained against these assets (bond investments) and the interest is not tax free.

Another  option is available under Section 54F wherein the gain is exempt from tax if the entire sale consideration is invested in the purchase of one residential house property within one year before or two years after the date of transfer of such asset. Or, the individual can construct one residential house within three years after the date of such transfer. If the entire consideration is not invested, exemption on gain will be allowed only proportionately. This benefit is available only if the individual does not own more than one residential house property exclusive of the one bought to claim exemption under Sec 54F.
Hope this helps.
Rajgopal Sripathi

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