ADVICE ON THE BEST OPTION

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LALIT (Querist)
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29 September 2010 KINDLY ADVICE ON THE BEST COURSE OF ACTION. MY REQUIREMENT IS THAT I HAVE TWO RESIDENTIAL PROPERTIES AND WANT TO SELL BOTH AND USE PART OF THE SALE CONSIDERATION FOR PURCHASING A RESIDENTIAL FLAT AND USE THE BALANCE AMOUNT FROM THE TOTAL SALE CONSIDERATION FOR STARTING MY BUSINESS.
THE DETAILS PERTAINING TO THE TWO PROPERTIES ARE; FIRSTLY, A PLOT WAS PURCHASED IN FY 2004-05 FOR Rs. 20,00,000/- AND THEREAFTER SOLD IN DEC 2009 FOR Rs. 60,00,000/- AND FROM IT PURCHASED A FLAT (NO 1) FOR Rs. 48.00 LACS FROM THE SALE CONSIDERATION AND PAID TAX ON THE BALANCE AMOUNT FROM THE SALE CONSIDERATION AND USED IT. NOW THE SALE OF THIS FLAT WILL FETCH ME Rs. 52,00,000/-. SECONDLY, A 2BHK FLAT (NO 2) WAS PURCHASED IN JAN 2007 FOR Rs. 20,00,000/- AND NOW WANT TO SELL IT AND IT WILL FETCH ME Rs. 52,00,000/- FROM ITS SALE.
THE FLAT WHICH I WANT TO BUY WILL COST ME Rs. 52,00,000/-.
KINDLY CONFIRM WHICH OPTION WILL SAVE ME MORE TAX; OPTION 1 - FLAT NO 1 IS SOLD AND A NEW FLAT PURCHASED FOR THE FULL SALE CONSIDERATION ( THAT IS, Rs. 52,00,000/-) AND TAX ON THE FLAT NO 2 IS PAID AS PER WHAT IS DUE IN THIS CASE AND ALSO KINDLY INDICATE HOW MUCH WOULD IT BE?. OPTION 2 - FLAT NO 2 IS SOLD AND FLAT PURCHASED FOR THE FULL CONSIDERATION (THAT IS, Rs. 52,00,000/-) AND TAX PAID ON THE FLAT NO 1 IS PAID AS PER WHAT IS DUE IN THIS CASE AND ALSO HOW MUCH WOULD IT BE?.
I AM A SALARIED PERSON HAVING ANNUAL INCOME ABOVE OF Rs. 10,00,000/-

CA Shiv

CA Shiv (Expert)
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29 September 2010 You can claim 54F for the other property.
I hope you had income from House property from one flat which is not self occupied. You are showing it in Tax return.

Its better to sale flat no. 2 and take benefit of 54f.

for flat 1 you have to pay LTCG for the Plot also as you are selling th e flat within 3 years of purchase and the normal tax only...