I have sold our ancestoral agricultural land in Punjab recently. We have been told that it is within 8 Kms of municipal limits and hence categorised as urban land, which is taxable for the purpose of CG (rural land is tax free). Further research indicated that proceeds from agricultural land may either be re-invested in purchase of another agricultural land or a residential property in order to be eligible for Capital gain rebate under income tax. Investment in Commercial property is not eligible for any rebate.
1. Can anyone please confirm if this is correct.
2. Also, if I buy residential property will I get the benefit of cost indexing as I will get if I re-invest in agricultural land?
I do not intend to purchace another agricultural land, therefore, the only option left for me in to buy residential land. BUT, now I find out that since I already own a residential property in India, I cannot claim capital gain rebate on that new property I may be planning to buy.
1. Can someone tell me if this is true? Is CG rebate not eligible on the second residential property. I though there was an ammendement to this section sometime back and second house is eligible
2. If it is true, then in my case how can I get the benefit of the CG rebates aside putting money in capital bonds for 3 years?
Any information will be greatly apprecieted. Also, if anyone can point me to any informative material that may be available online.
