Someone sells property which can be used as commercial and residential either purpose. For last 3-4 years, it was not used at all as either, but before that, it was used as a commercial.
While selling such property, there is a capital gain. If person buys some commercial property out of sale proceeds, can that be considered for claiming exemption under capital gain reinvestment?
YES EXEMPTION WILL BE ALLOWED. BUT I M NOT CENTPERCENT CONFIDENT ABOUT THAT.
Dear Rakesh & Manoj,
Based on the facts provided by you, the only possible exemption is exemption u/s 54. However even this exemption is subject to various conditions, important ones being:
1) the asset sold should be long term capital asset being a building or land appurtenant thereto;
2) it should be a residential house chargeable under the thead "Income from House Property";
Regards
Kanti Jain
Dear Friends....
As per Sec 54, exemption will be allowed only when the asset transfered is a Long term Asset..
Sec 54 - Transfer of Res. house and Purchase / Construction of RESIDENTIAL HOUSE...
Since in the above case the assessee buys commercial property it does not qualify for exemption u/s 54..
I dont think any exemption will be available if it is invested in Commercial property...
The entire CG will be taxable...
correct me if i m wrong....
Dear rakesh,
I hope ur query is clarified or else provide us the additional details to furhter probe into it.
Regards
Kanti Jain
Hello, I have about 4 residentially classified properties. I sold one residential land(not the one I am living in today) and looking to save on the capital gains tax. This land was purchased in the early 90s and sold recently in 2011 mid
The options I have to save on taxes are
1) invest in an apartment for over capital gains amount
2)invest in another land and construct a small house property (Should I physically live in that property?)
3)Buy a land with house for over capital gains amount
Will I save tax by any one these means per section 54. How long should I hold these properties?
I am out of time to invest in Bonds and hence that is not an option. If I have to put that capital gains in that Governement savings account till I find an investment should I invest before the tax filling(ie July)? Should I put only capital gains amount or entire sale proceeds?
All help is appreciated as I am extremely confused.
Thanks
CAclubindia
