Rakesh (Proprietor) (70 Points)
10 January 2012I have 2 houses. 1 is self occupied. 2nd is given on rent and income is shown under ' Income from House Property". I want to sell the house which is given on rent. How can I save capital Gains? Can I invest CG in another residential property and claim CG exemption under 54.
CA Ketan Waghela
(Partner at Elite Educare)
(356 Points)
Replied 15 January 2012
Rakesh ji,
You can sell your 2nd house and can claim exemption u/s 54 provided it is a Long Term Asset.
Sec. 54 states:
In order to claim exemption u/s 54, you need to make investment in another residential house property 1 year before or 2 years after the sale in case of purchase or within 3 years in case of construction.
The exemption will be lower of:
If the cost of the new house property OR LTCG
If the CG in the new property is could not be fully or partly reinvested for the purposes specified in the said section then it should be deposited with the special bank under capital gain scheme account.
Analysis of 20 GST Notices (including 2 Appeals) and Practise on Drafting(with recording)
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