Would you pl clarify the following taxability of my capital gain.
11-10-2011 : I entered into an agreement to sale a property purchased before 1980 at Rs. 2 lacs. Sale Value is Rs. 90 Lacs. Received Advance from purchaser Rs. 35 Lacs.
15-01-2012:I paid advance Rs. 35 lacs against Booking of a Flat for Rs. 70 Lacs.
15-06-2012 : Sale will be executed and balance sale proceeds will be received from the purchaser of my property.
15-8-2013 : I will take posession of the new flat after paying balance amount of Rs. 35 lacs.
Question :1. Can I avail capital Gain exemtion u/s 54 of the amount paid during 2011-12.
2. if no, then can I claim exemtion during FY 2012-13 whole amount of Rs.70 lacs.
3. If no . By doing what whole of my capital gain can be exemted against the above mentioned investment in property.
Pl advice me. Thanking You Madhab bmadhab@rediffmail.com
21 May 2012
There would be minimum capital gains tax in any case as indexed cost of acquisition would be around Rs. 16 lacs sale value Rs. 90 lacs and investment u/s 54 Rs. 70 lacs. So around Rs. 4 lacs would be capital gains in any case.
To claim exemption u/s 54 for safe side deposit Rs. 35 lacs in capital gains scheme with nationalised bank and use it when you are making payment for the new flat. As your flat purchase would be within one year before or two years after the sale of flat then you can claim exemption u/s 54.
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