Tax Column

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Tax Column

The new house must be held for a minimum of three years from the date of purchase. If it is sold before three years, exemption claimed earlier is withdrawn and becomes taxable as capital gain in the previous year in which the new house was sold. Since you sold the new house within three years, exemption of ₹8 crore claimed earlier will be withdrawn and the same is taxable in the current financial year. Since you held the new house for more than two years, it becomes a long-term capital asset and accordingly the entire exemption will be taxed as long-term capital gain.

The new house must be held for a minimum of three years from the date of purchase. If it is sold before three years, exemption claimed earlier is withdrawn and becomes taxable as capital gain in the previous year in which the new house was sold. Since you sold the new house within three years, exemption of ₹8 crore claimed earlier will be withdrawn and the same is taxable in the current financial year. Since you held the new house for more than two years, it becomes a long-term capital asset and accordingly the entire exemption will be taxed as long-term capital gain. 

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