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If you invest the gains from the sale of a property into buying or constructing another residential property within the specified time frame (1 year before or 2 years after sale for purchase, 3 years for construction), you can claim exemption on the capital gains.
By investing up to Rs 50 lakhs of your capital gains in specified government bonds issued by NHAI, REC, PFC, or IRFC within 6 months, you can claim full exemption on the invested amount. These bonds have a lock-in period of 5 years.
If a property is jointly owned, capital gains can be split among co-owners proportional to their share, allowing each to claim exemptions (like Rs 1.25 lakh basic exemption), effectively reducing tax liability.
Offset your capital gains with capital losses incurred from selling other investments like shares or mutual funds. Losses lower your overall taxable capital gains amount.
If you cannot immediately reinvest in property or bonds, deposit the capital gain proceeds in CGAS to claim exemption while arranging reinvestment within the allowed time frame.
You can reinvest capital gains from residential property into shares of eligible manufacturing companies to claim exemption. This supports industrial investment.
Deduct allowable costs like brokerage, renovation, legal fees from the sale price or cost of acquisition to reduce the taxable capital gain. Properly documenting these expenses can lower tax payable.
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