Income Tax: Selling jewellery to buy a house? You can claim exemption on capital gains
LTCG) tax. And if the assets were sold within three years of purchase, you are entitled to pay short-term capital gain tax, which means the gains are added to the tax slab. Income Tax (I-T) Act 1961 allows taxpayers to claim tax exemption of LTCG under section 54F.
Under this provision, if you have earned gains by selling an asset, you can claim exemption on tax by buying a residential property. 1. The property must be bought either one year before or two years after the sale of the purchase of jewellery.
2. The property must be constructed within three years of sale of the old asset. “Taxpayers must be mindful of the fact that they only purchase a residential property and not just any property.
And moreover, it must be bought one year before or two years after the sale of assets on which capital gain accrues," said CA Chirag Chauhan from Mumbai-based Chauhan & Co. ALSO READ: Gold prices: Precious metal rates stabilised, hovering around ₹72,000 per 10 gram; Is it right time to invest? “Section 54F of the Income Tax Act allows individuals to claim an exemption on long-term capital gains earned from selling long-term capital assets such as jewellery, shares, and other capital assets except for house property if the sale proceeds are reinvested for the purpose of purchasing or constructing a house with some conditions," said CA Paras Gangwal, Founder of ThetaVega Capital. “Taxpayers can’t claim this exemption if they have more than one residential property. The maximum cap of claiming exemption is ₹10 crore, which was introduced in Budget 2023, prior to which — there was no such limit," he added.
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