Residential property transfer - land - ltcg

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Kapil Khanna (Querist)
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30 May 2013 My wife recently sold residential plot of land in a society. No house was constructed. It was a long term property transfer (held for > 3 yrs).

We would like to benefit from LTCG tax provisions by purchasing another property (within 2 yrs).

1. Can we purchase land/plot OR it must be a constructed house only?
2. Which sections/sub-sections of sec. 54 should I read for details.

Thanks,
Kapil

Pankaj Gupta

Pankaj Gupta (Expert)
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30 May 2013 As sec 54 is applicable on sale of residential house property, therefore the same is not applicable in your case.
You can get benefit of the following sections-----

1. Sec 54EC --
If the long term capital gain is invested in the purchase of certain specified bonds within a period of 6 month of transfer of capital asset.

2. Sec 54F --
If the entire sale consideration is invested in the purchase of a residential house property within a period of 2 years of transfer of capital asset.But for this section, the assessee must not hold more than one house property on the date of transfer.

Kapil Khanna

Kapil Khanna (Querist)
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13 July 2013 If I had constructed a minimal temporary (low cost) residential structure, then would I qualify for exemption under section 54 (capital gain portion only)?

Thanks,
Kapil

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