Capital gain issue

This query is : Resolved

TARIQUE RIZVI (Querist)
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04 August 2017 I had sold a residential property in Nov 2016 completion of six months was effected in May 2017 but before the expiry of six months in May 2017 a token money of Rs 10,000 in cash was paid to the seller under an agreement made on a N J Stamp Paper of Rs 100 whereby was agreed mutually that the deal shall be finalized during the period from Aug 2017 to Sept 2017 and then the final payment shall be made to the seller at the time of execution of the final deal. Now it is the time of the final deal and the final payment. Whether the capital gain tax will have to be paid following the expiry of six months and the residential property was not purchased against the full and final payment to the seller. Simply token money was paid initially.

K Srinivas, CMA CS

K Srinivas, CMA CS (Expert)
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04 August 2017 For claiming exemption of Long term capital gains by way of Purchasing or constructing a residential property is :

1) one year before the date of sale of your property or two years after the date of sale of your property, in case you are investing the entire capital gains to purchase a residential property

2) within 3 years from the date of sale of your property, in case you are using the entire capital gains to construct a new property.

6 months time line doesn't apply in your case

K Srinivas, CMA CS

K Srinivas, CMA CS (Expert)
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04 August 2017 However, since you will pay the full price only upon registration of the new property, you should invest the Capital gains amount in Capital Gains Account Scheme in any Public Sector bank within the due date for filing returns.

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K Srinivas, CMA CS

K Srinivas, CMA CS (Expert)
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04 August 2017 You can claim this deposit amount as exemption under Capital Gains and thereby avoiding paying tax on the capital gains.