tax on long term capital gains on residential property

This query is : Resolved

Hashim (Querist)
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07 August 2010 Mr A have sold a house in July 2010 which he had purchased in May 2006 and received gain.
(1) Will Mr A have to pay income tax on long term capital gains in the year ending 31.3.2011, if he reinvest in another house before 31.3.2011.

(2) if Mr A use this gain for purchasing another house after 31.3.2011, will there be any tax liability in the year ending 31.3.2011.

(3)in how much time span/duration, Mr X can reinvest the capital gain for purchasing another house without any tax liability

CA Sanat Pyne

CA Sanat Pyne (Expert)
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07 August 2010 1. NO UNDER SECTION 54 AMOUNT WILL BE EXEMPTED.

2. IN THAT CASE HE SHOULD DEPOSIT THE MONEY TO CAPITAL GAIN ACCOUNT SCHEME TO SAVE TAX.

CA Sanat Pyne

CA Sanat Pyne (Expert)
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07 August 2010 the capital gain arises from the transfer of a long-term capital asset, being buildings or lands appurtenant thereto, and being a residential house, the income of which is chargeable under the head "Income from house property" (hereafter in this section referred to as the original asset), and the assessee has within a period of one year before or two years after the date on which the transfer took place purchased, or has within a period of three years after that date constructed, a residential house.

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VINOD ARORA

VINOD ARORA (Expert)
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07 August 2010 1. Exempted if reinvested amount is greater than amount of capital gains, calculated as per method permissible under IT ACt, from sale of property in question.

2. Exempted, as an interim measure, for current AY if he deposit the money in CGAS before due date for filing of return.

3. WIthin 2 years/3years from the date of transfer, he has to purchase/construct another house to finaly avail the exemption. ANy house purchased 1 year before also is allowed to be considered for the purpose.