Tax exemption on sale of old flat and purchase of new flat

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Snehashish Ghosh (Querist)
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26 November 2017 I sold my 18 year old flat in Ghaziabad for Rs 21.65 lakhs in Oct 2017. I had purchased the old flat in Jan 1999 for Rs 5 lakhs and had paid stamp duty of Rs 50,000. I have estimated the Cost of the Flat after INDEXATION as Rs 18.1 Lakhs roughly.
1. Is it correct that my Capital Gain is Rs 3.55 Lakhs (i.e. 21.65 Lakhs - 18.1 Lakhs) ?
2. Is it correct that only this Capital Gain of roughly less than 4 Lakhs is taxable ?
3. Is it correct that just before filing my Income Tax Return in Jul 2018 for F.Y. 2017-18, if I purchase a new flat in Kolkata for say Rs 5 Lakhs (just over Rs 4 Lakhs), then I will NOT have to pay any Tax at all ?
4. Is it correct that the relevant Section for the tax exemption in question 3 above is Section 54 ?

I have already paid Rs 8 Lakhs to a Developer/Promoter ( a Proprietorship firm) for the purchase of a new Flat for Rs 11 Lakhs in Kolkata by Online Transfer (IMPS) from my bank account before 02 Nov 2017. I have collected the Sale Agreement signed by him and collected money receipts for all the online payments.
But the Remaining Payment and taking Possession of the Flat (Possession Letter) will be delayed beyond last date of filing income tax return i.e. 31 Jul 2018. In fact it may be delayed to as late as Sep 2018. I will pay Stamp Duty and Register the Flat in my name only after I get possession i.e. not before Aug 2018.

5. Is it correct that since my capital gain from sale of my old Flat is only Rs 4 Lakhs (see Questions 1 and 2 above) and I have already paid Rs 8 Lakhs to the Developer and have Sale Agreement and money receipts, I do not have to pay any tax on the capital gain and can claim exemption under section 54 ?
6. Or is it that full payment and Possession Letter or Sale Deed (Registry) is MUST for claiming ANY Tax Exemption under section 54 in the income tax return ?

Looking for a quick response.

Soumitra Basu

Soumitra Basu (Expert)
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27 November 2017 Registered Market Value of the Flat shall be treated as Sales Proceeds.
For Indexation the base year should be 2001 as 100.
Calculate the capital gain as mentioned above.
you have to invest the capital gain before 31.07.2018 for purchasing of Flat.
Since you have already invested Rs. 8.00 Lacs as booking amount to the Developer, there will be no tax provided the capital gain is less than that.

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