I have a house property as self occupied acquired 5 years ago.
I have entered into a purchase agreement with a builder regarding purchase of a flat in a under construction building.I will get the possession after 6 months from now.
I have a plan to sell my existing self occupied property and i want to avoid LTCG on the same.
As per section 54 of Income Tax Act, I can purchase a house property "one year before the date of transfer" to avail exemption of LTCG.
In my present situation as discussed above, my questions are as below:-
a) Will i get exemption under section 54 of Income Tax Act for my booking of A FLAT in a under construction building. Will it be a "purchase" and not construction so as to qualify for "one year before the date of transfer" cretaria ?
b) What will be the "date of purchase" ? Will it be the date of buy agreement or the date of getting possession ? This is relevant because accordingly i will plan the date of sell to qualify for exemption under section 54 of income Tax Act.
If answeres are based on any Rulings/circular, please indicate some reference so that i can retrieve the same.
CAclubindia
