Purchase date for capital gain

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Harish Chandra (Querist)
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22 September 2011 I have sold a flat in Gurgaon for Rs. 6500000 on 28.02.2011 and I have purchased a Flat of Rs. 12000000 in Gurgaon

I made Agreement dated 1.6.2006 made with company for a Flat and in agreement it was contained that 90% payment should be made withing 15 months , and after this payment I was allotted on 5.9.2007 flat no.X for 90% payment and balance 10% amount to be paid on possession on 17.08.2010 and total purchased cost is Rs. 4800000

My question can I claim Exemption US 54F for this flat sold after 3 years as I was alloted this flat on 5.9.2007.

Please help me as have to filed return on 30.09.2011

CA Ankit Verma

CA Ankit Verma (Expert)
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22 September 2011 First of all Sec 54F cannot be claimed for exemption in case of CG from sale of House property.

You can claim exemption u/s 54EC or Sec 54 in case of CG from sale of House Property.

For claiming exemption u/s 54 against LTCG, the condition is to buy residential house within a year before the date of transfer of old house or in two years after the transfer.

&

For claiming u/s 54EC you must invest your long-term capital gains (not the sale proceeds), either wholly or in part in a specified instrument, within six months of the transfer of the asset. The exemption is available to the extent of the gains invested or the cost of acquisition of the asset, whichever is less.

SO you are left with only Sec 54 to claim exemption for your flat in gurgaon as u cannot claim Sec 54EC because already 6 months have elapsed for you to make specified investments in Bonds.

& regarding date of purchase... As per Sec 53A of "Transfer of Property Act 1882" since you have taken possession & made full payment on 17/08/2010, this shall be your date of purchase of Gurgaon flat.
so you have made STCG on sale of 1st flat & not LTCG.

& Sec 54 is only for LTCG... So I guess you can neither claim Sec54 nor Sec 54EC... & as such Sec 54F is not available to you...

This is my view. If required you may consult other experts too.