Thread: Advice Required on Capital Gains saving

Hi,
We recently (few months back) sold a family property which was in one of my parents name (now deceased) and have divided the amount received equally among all the children.

I understand that the best way to avoid tax on this capital gains is to re-invest in some other real estate. Is this true?
If so this may be a slight problem as the individual amounts (~3 lakhs) is not sufficient to get an individual house or plot?
So I was wondering if anyone has any advice on what would be a good way to reinvest this amount?

Also do we have to file this amount as capital gains in the IT returns for last year or can it be done anytime within 3 years?

Thanks for your help in advance

You do not have to invest in property only. You can invest in any instrument that comes under "Capital" category. You have the following options:

a) Property (but you have ruled it out)
b) Equity Stocks or Mutual Funds - still an excellent opportunity to invest in this area because the bull run has just started.
c) Debt instruments such Government Infrstructure Bonds.

Visit a good CA and Tax planner and he will advice you properly.

Thanks for the info, appreciate it. Will look into these.

Hi
Don't know if i have reached late in reading this post (since this is a financial matter)

But a good option is to go for Rural Electrification Corporation (REC) bonds...this is advice given to me by a well known C.A. who happens to be a good friend of mine and i asked after reading your post.

Rural Electrification Corporation Limited - Capital Gains Tax Exemption Bonds

outlookmoney.com: REC Bonds Are Back

From my place, one can go for this option by investing in these bonds, via HDFC bank who happen to be intermediary for this purpose, one gets returns annually

These bonds have a lock-in of three years. The minimum amount that you can invest in a financial year is Rs 10,000 and the maximum Rs 50 lakh. The coupon rate on REC bonds is 5.75 per cent payable annually and taxable.

Hope this helps you in some way