Applicability of ltcg on sale of residential property

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

09 April 2012 I have in March 2012 taken a home loan for flat. I have paid all but Rs.8 lac to the builder. The possession will be sometime in May 2012.

I am planning to sell my old flat purchased in Feb 1998. There will be a LTCG of approx. Rs. 9 lac. Out of the total sale proceeds, I will repay Rs.10 lac home loan and reduce the loan before taking possession of the new flat.

The new flat is purchased two months prior to the sale of old flat, but possession is not taken yet.

I want to know if any LTCG tax will be applicable.

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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09 April 2012 Possession is not the important for getting exemption u/s 54. You are eligible for exemption u/s 54 since you have already purchsed the falt well within the time.

Mihir Doshi

Mihir Doshi (Expert)
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09 April 2012 You are eligible to claim the exemption.
Rule:
Property buying time = 1 year before or within 2 years from transfer of property

or construction of property with in 3 years.

Thanks
Mihir Doshi

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