PRIYAMVADAPADMANABHAN (PROP) (29 Points)
23 January 2014my client had sold 2 seperate land one in sep 2011 and dec 2011
they had entered into an agreement with the the buyer to buy residential flat the purchase deed dated june 2010 for which they had received the pocession only in march 2012 they used the entire capital gains in sale of land towards the new house . will they get exemption u/s 54f. they do not own any other property
please clarify with help of any case laws. which date will be appropriate date of deed or date of pocession
Mihir
(Wealth Manager)
(5293 Points)
Replied 24 January 2014
Exemption can be claimed if the new property if purchased within 1 year prior to the sale and within 2 years after the sale. If investing in a residential property, the assessee must not have more than one residential property to avail exemption u/s 54F.
sarath
(CA)
(82 Points)
Replied 24 January 2014
Agreed with Mihir,, If you are "Purchasing" , then House you purchased "One year before" or Two years after are eligible for exemption under section 54F.
Refer point (C) section analysis Of section 54F on https://www.exploreincometax.com/Indian-Income-tax-Act-1961/Section-54F
PRIYAMVADAPADMANABHAN
(PROP)
(29 Points)
Replied 24 January 2014
in contn with above
1 what will be the case when res house is const
2 the ass off is of the view that the date of purchase of new flat shoud be taken ,( date given in the initial purcahaase deed) if that case ltcg exemt u/s 54f wouls be disallowed
if completion date is taken it will be before2/3 year from the date of transfer of land
Mihir
(Wealth Manager)
(5293 Points)
Replied 24 January 2014
Within 3 years, the construction should be complete. But in few cases, the AO has allowed exemption where the construction is not complete but it is nearly habitable and the LTCG has already been utilised in the construction.
P M Arora
(CA Business)
(22 Points)
Replied 04 February 2014
weather a new residential house (new Asset ) purchased to avail exemption of the long term capital gain u/s 54F can be let out within 3 years of its purchase. OR
a) can be let out?
b) can be it sold within 3 years of its purchase without losing the benefit of exemption is availed?
Please rply as soon as possible ....
CAclubindia
