One of my friend purchase a flat in 2002 for Rs.16 lakh. He sold the house for Rs.47 lakh in November, 2009. He proposed to purchase a new flat of bigger size for Rs. 40 lakh. please clarify the provision (i) Time upto which he can purchase the new house (ii)The net capital gain of Rs.31 lakh(Rs.47-16 lakh, cost of old flat)) will be fully utilised while purchasing flat of Rs.47 lakh. What will be the treatment of remaing Rs.7 lakh(Rs.47 -40 ).
(iii)Whether the balance Rs. 7 lakh can be invested in purchasing new property and whether the same is subject to tax and need to be deposited in capital gain A/c in nationalised bank
