A friend of mine purchased a flat in the year 2001-02, which he sold off this year on 21.01.2014. The possession of this house was taken by him on 07.06.2001, but the deed was registered on 22.03.2003. The purchase price of house was Rs. 413980 plus stamp duty value Rs. 41400 plus some maintenance work of Rs. 30000. He had cleared all his house loan dues till the date of selling this property i.e. this year. Now the selling price of property was Rs. 20 Lacs, which he received in 2 installments Rs. 200000 on 27.01.2014 & Rs. 1800000 on 06.03.2014 (which is also the date of sale deed). I have the following queries in this case:- 1. Firstly, what should I take as the cos of Acquisition? As per my understanding 413980 plus 41400 only. The maintenance work is not supported by any documentary proof and it was expenditure on some furnishing and fitting. 2. Second,What date should be taken as the date of acquisition? the date of posession or the date of sale deed? Since both of them happened in 2 different years? 3. Will the receipt after selling the property in 2 installments make any difference? I should take the full value of consideration as Rs. 20 Lacs in the year 2013-14 itself, right? 4. Now my friend also wants to take benefit of exemption from capital gains by investing in another house property. The section applicable would be section 54, if i am not wrong. How can he claim the benefit under this section if he has not yet bought the property? To put it more clearly, He has capital gains after indexation for FY 2013-14 equal to Rs. 996240 (taking year 2001-02). To avail exemption under sec 54, he must buy new property within 2 years or construct one within 3 years from date of sale. Now, since he has not yet bought any property but intends to do so in future, should he invest in capital gains account with a bank? What amount should he invest in this account? As per my knowledge, Rs. 996240 should only be invested to avail the complete exemption from capital gains. Or should he invest the entire proceeds?
Please do clear the last point of my query. Would be really grateful.
CAclubindia
