one of my client being a lady has owned a residential house property since 2005.She is regular I.T.Assesse.During F.Y.2013-14 for which a return is to filed now prior to 31/03/2015. She has sold the said house in June,2013 & purchased another residential house property in April,2013.The investment in new house property from means of unsecured loans from relatives which is exceeding the sales proceeds from the sale of old house property likely to be sold in June,2013. Thereafter she has paid the said unsecured loans from the sales proceeds on sale of old house property during the same year.
Now query is as whether she can claim a deduction under section 54 of I.t act to avoid long term capital gain on sale of house property as she invested entire sales consideration in purchase of another new house property to claim the benefit of section 54 or not
Please reply at the soonest to enable file the income return prior to 31/03/2015.
17 March 2015
As I understand from your query: Your query is the property purchased out of unsecured loans.....can it be claimed u/s 54
The answer is YES.
The reason is : when section permits the assessee..."purchase of new house property one year before or 2 years after".....presupposes the situation as given by you.
I could not understand why you confused that the query is not proper as the same is self expeditionary i.e. old residential house is sold in June,2013 & purchased new one in April,2013 with the sources of unsecured Loans from relatives which the assesse has paid after june,2013 when she gets sales consideration on sale of old house.
please give your valuable view or opinion as to better tax planning.
17 March 2015
Read between the lines might have caused some problem.... The better course of action could be...mentioning House A...House B...etc.. This not only reduces ambiguity but increases clarity.. Your views please.
CAclubindia
