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capital gain

19 August 2019

if I sold a residential plot in 2018 and again purchase a another residential plot in same year then will there a capital gain be formed?

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5 Replies

Kapadia Pravin (17259 Points)
Replied 19 August 2019

Capital Gain will be there on sale of residential plot. No deduction will be allowed for purchase of another residential plot.

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rama krishnan (12239 Points)
Replied 19 August 2019

there's no deduction for investment in residential plot but if you construct residential property in that plot then purchase cost of that plot along with construction cost can also be taken for investment purposes

Suresh Thiyagarajan (Student) (3986 Points)
Replied 20 August 2019

1. According to sec 54 exemption will be available if the consideration from the sale of residential property is used to purchase another residential property within a period of 1 year before or 2 years after or in case of construction of residential property within a period of 3 years from the date of transfer.
2. In your case, if the sale consideration is utilized for acquiring a new residential property within a period of 2 years after the same of the residential property then to the extent of such investments, exemption u/s 54 will be applicable.
3. In that case, there will not be any capital gains to the extent of investments in new residential property.
Please correct me if the above solution has an alternative view.

Kapadia Pravin (17259 Points)
Replied 20 August 2019

The querist sells residential plot and again buys reivest into residential plot.
so no 54 benefit.

RAMAKRISHNAN R (INCOME TAX OFFICER) (1736 Points)
Replied 20 August 2019

Mr. Pravin, in order to construct a residential property, the prerequisite condition is that he should have a land. So cost of land is also included when an assessee constructs a property and if the construction is completed within the specified time limit, then he's eligible for deduction