LTCG exemption - sale of property

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A taxpayer sold a flat on 23 September 2024 and had an agreement to purchase a new flat under construction on 30 May 2023. The query asks if this arrangement qualifies for Long Term Capital Gains (LTCG) tax exemption, as the purchase agreement was made more than a year before the sale. The advice given is that the taxpayer is not eligible for the exemption because the purchase agreement is more than one year old, and the property being under construction does not alter this outcome.

Suraj

Suraj (Querist)

16 February 2025 Dear Sir / Madam,

My query is as follows:
Mr A sold his flat on 23-09-2024. He entered into an agreement to purchase a new flat on 30-05-2023, which is still under construction. To claim the exemption of LTCG, he must purchase the new property one year before the date of sale of the old property.

In this case, it is more than one year (30-05-2023) before the sale date of the old property (30-09-2024), but still under construction.
Will he be eligible for LTCG exemption?

Kindly guide.
Regards,
Suraj