Section-54f

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Himanshu makkar (Querist)
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12 December 2013 I SOLD A RESI. PLOT & PUR. A RESI. PLOT & STARTED CONSTRUCTION ON IT, NOW I WANT TO SELL THE NEW PLOT(SEMI CONSTRUCTED) & PUR. THE ANOTHER RESI. PLOT & BUILT HOUSE ON THAT

THE QUES IS WHEATHER SEC 54 F IS APPLICABLE ON SALE OF NEW PLOT?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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12 December 2013 PLEASE MENTION THE DATES OF SELL & PURCHASE OF ALL THE 3 PLOTS IN QUESTION.
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ALSO SAY HOW MUCH WOULD YOU LIKE TO SPEND.
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IF YOU DO NOT WISH TO PROVIDE THE DETAILS- AT A FIRST INSTANCE THE ANSWER IS- NO

Manish Bhandari

Manish Bhandari (Expert)
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12 December 2013 Condition for 54F - the asset transferred should be LOng Term & other than residential house.
First is it falling under LTCG? if yes is it residential?
As mentioned the semi constructed property if not suitable for residence then it will be other than residential. Provided further that you take appropriate certificates from valuation authorities regarding its status. It will be 50:50 case as per mey opinion if you want to avail Tax planning benefits.

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Himanshu makkar

Himanshu makkar (Querist)
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12 December 2013 THANKS 4 REPLY

SIR THE FIRST PLOT SOLD ON 08,12,2012(PUR IN 2001 FOR 225000RS)FOR 1228000RS., AGAINST THAT PLOT PUR. ON 12.06. 2012 FOR 3000000RS., CONSTRUCTION STARTED SIMULTAN, TILL TODAY(10-15%), NOW PERSON WANTS TO BUY BIG PLOT(IN 2014) & CONSTRUCT HOUSE ON THAT, WE HAVE TO COMPUTE CAPITAL GAIN FOR A.Y. 13-14 & SUGGEST HIM FOR FUTURE.

Himanshu makkar

Himanshu makkar (Querist)
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13 December 2013 THANKS 4 REPLY SIR THE FIRST PLOT SOLD ON 08,12,2012(PUR IN 2001 FOR 225000RS)FOR 1228000RS., AGAINST THAT PLOT PUR. ON 12.06. 2012 FOR 3000000RS., CONSTRUCTION STARTED SIMULTAN, TILL TODAY(10-15%), NOW PERSON WANTS TO BUY BIG PLOT(IN 2014) & CONSTRUCT HOUSE ON THAT, WE HAVE TO COMPUTE CAPITAL GAIN FOR A.Y. 13-14 & SUGGEST HIM FOR FUTURE.

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CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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13 December 2013 Query -

1.The plot was (PUR IN 2001 FOR 225000RS)

2. THIS PLOT IS SOLD ON 08,12,2012 1228000

3. PLOT PUR. ON 12.06. 2012 FOR 3000000RS., CONSTRUCTION STARTED SIMULTAN, TILL TODAY(10-15%),

4. NOW PERSON WANTS TO BUY BIG PLOT(IN 2014) & CONSTRUCT HOUSE ON THAT,

5. HE WANT TO SELL THE PLOT MENTIONED IN
POINT NO 3.

6. WE HAVE TO COMPUTE CAPITAL GAIN FOR A.Y.
13-14 &
7. SUGGEST HIM FOR FUTURE.
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Reply - In the absence of date/month of 2001 has not been furnished the computation of capital gain is left upon you by applying the cost intlation indices of the respective years.
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Such capital gain would be exempt U/s 54F as plot of Rs 3000000/ has been purchased within the stipulated time by the assesseee and construction has also been started. This covers the entire sales consideration of Rs 1228000/-.
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AY 2013-14 Capital gains will be exempt U/s 54F.
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If he purchases another plot and starts construction within 3 years of transfer of the first plot , it will tantamount to be violation of condition (iii) mentioned in clause (a) of the proviso to Section 54F(1).

As such the capital gain exempt U/s 54F in AY 2013-14 will be treated as as LTCG of the PY in which the condition is breached.
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He is advised to continue the construction on plot mentioned in Para No 3 and get completed the WIP. If he has surplus funds , he can buy an open plot and keep it as such till the restriction period of 3 years gets completed.
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