Yes, you can still avoid long-term capital gains tax even if you start construction just before the end of the 3-year period, provided you meet certain conditions. According to Section 54F of the Income Tax Act, the entire sale consideration must be invested in the purchase or construction of a residential property within 3 years from the date of transfer.
Key Points:
- Investment of Sale Proceeds
: Ensure that the entire sale proceeds are invested in the construction of the new residential property.
- Construction Timeline
: The construction should be started within the 3-year period. Even if the construction is delayed due to valid reasons like medical grounds, the exemption can still be claimed if substantial progress is made within the timeframe.
- Proof of Investment
: Maintain records of all investments made towards the construction to substantiate your claim.
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Pls let me know if one can start construction of the house just before the end of 3 years of period after the sale of ancestral property? I mean can the person avoid long term capital gains if he is late in beginning the construction of house lets say on medical grounds but starts constricting just few days before the end of 3 year period?
GA
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2024-12-16T11:22:15+00:00 2024-12-16T11:22:15+00:00Comment
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