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Capital gain sec 54 exemption

NEHA KANORIA (Student CA Final ) (105 Points)

17 February 2015

My uncle sold a property for around Rs. 44 lakh on 11.04.2012, resulting a capital gain around Rs. 13.5 lakh. He booked a flat with total agreed value of Rs. 44 lakh to claim sec 54 exemption. He filed return for the period claiming exemption, till then Rs. 32 lakh was paid.

As of now he has paid Rs. 34 lakh against such property, but now he did not want to make the balance payment. because he will have to take a loan from the market for around Rs. 14 lakh for making final payment as well as registry cost.

What action should he take now ? (HYe has least interest to keep the property for lock- in period of 3 years)

Please help

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12 Replies

shikhar (LEARNER ) (1394 Points)
Replied 17 February 2015

Hello, Neha ji

If you sold your new assests within 3 year from the date of purchase then capital gain claimed as exemption(RS 13.5 lakh) shall be reduced from COST OF ACQUISITION of new assets.

Hence your cost of new assets will be reduced by 13.5 lakh and u hv to pay capital gain on such amount.(if you sale before 3 year)

Thanks

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NEHA KANORIA (Student CA Final ) (105 Points)
Replied 17 February 2015

But Sir is there any 3 party settlement possible withou any capital gain involved.

Like if I receive Rs 34 lakh back from a third party against that flat, will any capital gain be chargeable?

shikhar (LEARNER ) (1394 Points)
Replied 17 February 2015

Rs 13.5 Lakh will be charged to tax (as capital Gain) If u sale New assts before 3 year. . . . It dont matter u take back rs 34 Lakh or not.

NEHA KANORIA (Student CA Final ) (105 Points)
Replied 17 February 2015

But its not registered till now, nor the posession is taken place. So, if its not purchase, how can it be sold?

shikhar (LEARNER ) (1394 Points)
Replied 17 February 2015

U had already mention exemption for capital gain in itr for sale of your old assets.hence u cant pull your legs back now..u hv to hold new assets for atleast for 3 Year..other wise tax will be imposed

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NEHA KANORIA (Student CA Final ) (105 Points)
Replied 17 February 2015

okay, supposi I apay the tax imposed on me, but will I bea gainst facing short- term capital gain by receiving Rs. 34 lakh from the 3rd party, if the FMV of the flat rises on the date of sale, or it is irrelevant.

NEHA KANORIA (Student CA Final ) (105 Points)
Replied 17 February 2015

okay, suppose I pay the tax imposed on me, but will I bea against facing short- term capital gain by receiving Rs. 34 lakh from the 3rd party, if the FMV of the flat rises on the date of sale, or it is irrelevant?

shikhar (LEARNER ) (1394 Points)
Replied 17 February 2015

Neha...i think first check out what is the stamp duty value of that assets, u cant sale your assets below stamp duty (other wise stamp duty value will be consider as a sale value for assets)

As per your question i think fmv is irrelevent, but difference in sale consideration and cost of acquisition will charged to short term capital gain (if period is less then 3 year)

thanks