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Capital Gain Tax

Jagdish (Article) (123 Points)

02 June 2011

I purchased resi. plot on 31-03-2008 for 414230/-, further I sold it on 25-06-2010 for500000/-.

I purchased resi. flat on nov-2009 for2096171/-.

Wheather I m liable for tax on gain arise from it.?

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CA NITUL MEHTA (KPMG-Senior Consultant-International Tax ) (236 Points)
Replied 03 June 2011

I DINT ET YOUR POINT OF RESIDNETIAL PLOT IT ITS A RESIDNETIAL HOUSE YOU ARE COVERED UNDER SECTION 54 BUT AS YOU SOLD THE HOUSE WHICH I GUESS IT IS BEFORE BECOMING A LONG TERM ASSET YOU WONT GET EXEMPTION ANDYOU WILL GET TAXED

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Paresh Rathod (CA) (222 Points)
Replied 03 June 2011

If its residential property which you sold then as per Sec. 54 you will get exemption.

Yes — In Residential House, within 1 year before, or 2 years after the date of transfer (if purchased) or 3 years after the date of transfer

Agree with Mr. Mehta that plot cannot be termed as House, So exemption will not be available.

Paresh Rathod (CA) (222 Points)
Replied 03 June 2011

Since you have sold the residential plot and not the residence, exemption under section 54 is not available. However you can avail exemption u/s 54F or 54EC . If you have only one house at the time of claiming exemption u/s 54F, you can avail of exemption by employing sale consideration in buying the house within two years from the sale of land on which you gained or construct the house within three years.