Ltcg investment sec 54e

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Namit Nangia (Querist)
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19 March 2012 I earned Long term Capital gain in Dec 2011 with the sale of an asset (other than property). To save the Capital gain tax, I want to purchase an apartment that is being presently constructed by a builder.

My Questions are :
1. What is the time frame of buying this property? - 2 yrs or 3 yrs? Since I am an individual taxpayer, would the end date be the end date of filling return i.e. 31st Jul 2014/2015 or end of financial year i.e. 31st Mar 2014/2015 or 3 yrs from date of asset sale i.e. Dec 2014.

2. What do I need from the builder within this time frame to be applicable for the Tax exemption? Is it "completion certificate" or "registration of the apartment in my name" to get the Tax exemption?

3. If I book an apartment today I will invest all the Capital Gain from the sale of asset and take a bank loan for the remaining amount. If the builder fails to complete it / register it in this time frame, would I still be eligible for Tax exemption or would I have to pay the 20% LTCG Tax?

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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21 March 2012 If previously you do not own a house then the investment in house property is exempted from Tax u/s 54. In this case the investment is to be made within 1 year from the date of transfer of capital assets other than house property. You have to invest the capital gain and if you fail to do so than you have to deposit the entire sale proceed in a separate Capital Gains account before the due date of filing of your return for the assessment year 2012-13