1) Person A sold a flat in October 2014 and the capital gain out of it is Rs 10 Lac. 2) A has already purchased a plot in December 2013 for Rs 17 lac with a loan of Rs 6 lac. 3) Can the said purchase of plot in the past be considered under Section 54 to save tax on the capital gain on Rs 10 lac? 4) If yes, by when should A complete construction on the newly purchased plot?
10 April 2015
No. Exemption is not available in this case as the construction of property should only commence after the transfer of original property and construction should complete within 3 years from the date of transfer
10 April 2015
Thanks Mohit. The construction on the plot has not started yet. Does this make it eligible for exemption if the construction is started now?
CAclubindia
