Section 54

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

30 September 2011 i have recently sold a residential flat at gurgaon entitled for LTCG benefit, having completed 3 years. I have another residential flat in the same complex which has completed only 2 years. Do i need to reinvest in another residential flat to get LTCG benefit. If yes, then what is the EXACT process - do I need to invest in another residential flat within 6 months or FY12 end, whichever is earlier?

Preety Parik

Preety Parik (Expert)
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02 October 2011 To claim exemption of capital gain, u need to invest in another house within one year before or three years after, the date of sale of asset. (as per Sec 54(f).

Querist : Anonymous

Querist : Anonymous (Querist)

03 October 2011 Thanks but thats a very limited reply and possibly partly correct.. I am asking for a complete answer.
What I understand is this:
1. That I need to invest in another residential ready made property within 1 year before or 2 years after OR another under-construction property within 3 years after
2. If I have already invest 1 year earlier, then no issues. BUT if I have yet to invest in 2 years/3 years, then I need to do the following within 6 months:
A. Park the money into an SBI acct AND
B. Enter into agreement to buy

pls revert.

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Preety Parik

Preety Parik (Expert)
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03 October 2011

Read carefully Section 54F(4).
If the net consideration is not utilised for purchase/ construction before filing of return of income, then
1. Deposit has to be made in specified bank/ institution before the due date of filing of return. ( and not six months as spelt )
2. The deposit has to be appropriated towards purchase/ construction within 2years/ 3years of tranfer.
3. Once deposit is made before the due date of filing return, then the amount can be utilised for purchase/ construction within 2yrs/ 3yrs of transdfer

Querist : Anonymous

Querist : Anonymous (Querist)

05 October 2011 thanks for the info. Pls also clarify on this point:

If I already have a another house (which is tenented on the date of sale of the flat), then I am exempt from investing the LTCG in another residential property. Is this true?