09 December 2012
Dear Sir, Suppose an individual sells his ancestral residential house and after that sale he purchases an agriculture land from the sale consideration. Whether he will get exemption u/s 54 or he has to purchase a residential property from sale consideration to get exemption from capital gain. Please advise me.
09 December 2012
Section 54 exemption is available only when, if a new house property is purchased with the amount of capital gain. Exemption is not available for purchase of agriculture land. Had this land purchased for the purpose of constructing house on it within 3 years of transfer, then it would have become eligible for exemption under section 54.
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