You possibly can declare a tax exemption on long run capital beneficial properties from the sale of gold belongings underneath Part 54F of the IT Act, 1961. Part 54F gives an revenue tax exemption on capital beneficial properties earned from promoting capital belongings similar to shares, gold, bonds and so on., aside from a home property.
In the event you promote gold and reinvest the whole sale proceeds in direction of buying or establishing a home property, the capital beneficial properties you earn are allowed as a tax exemption underneath Part 54F.
For instance, in the event you had bought bodily gold for ₹6 Lakh in FY 2012-13 and bought it for ₹10 Lakh in FY 2018-19, your long run capital beneficial properties are ₹1.6 Lakh (after indexation). In the event you make investments the whole sale proceeds of ₹10 Lakh from gold in a home property, the capital acquire of ₹1.6 Lakh is not going to be taxed in your arms.
Nevertheless, it’s important to use the sale proceeds from gold within the following method to assert this tax exemption:
- It’s a must to buy a brand new residential property one yr earlier than the sale of the capital asset. OR
- It’s a must to buy residential property inside two years from the sale of the capital asset. OR
- It’s a must to assemble a residential property inside three years from the date of sale of the capital asset.
Suppose you might be unable to utilise the whole quantity of the sale proceeds to buy/assemble a brand new residential home property earlier than the ITR submitting due date. In such circumstances, you’ll be able to deposit the gross sales proceeds from gold in a Capital Good points Account with a public sector financial institution. You need to use this quantity to buy/assemble a brand new residential home property throughout the requisite timelines.
Archit Gupta is the Founder and CEO of Clear