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Exemption from long term capital gains tax

Anand (Avp) (67 Points)

02 September 2020

My mother sold a flat in her name on 30th Aug 2028...In the process, there was capital gain.

Understand, this year, deadline for claiming capital gains has been extended upto 30th September 2020 as against 30th Aug 2020 under normal conditions.

Now, we are purchasing a ready possession (OC received) flat against the capital gains in my my mother's name. Agreement registration + final payment shall be completed before 30th September 2020.

Question is
,Whether we need to get builder's possession letter before 30th September 2020 or only registered agreement with full consideration paid is sufficient to claim LTCG exemption?

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4 Replies

Prashant Sharma (84 Points)
Replied 03 September 2020

Since your residential flat was sold on 30th august 2020 u have 2 yrs to purchase new flat but if not purchasing within 6months of sale then deposit the amount in capital gain account. Extension of deadline was for FY 2018-2019.

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Anand (Avp) (67 Points)
Replied 03 September 2020

There was a typo....Flat sale was indeed on 30th Aug 2018 ( FY 2018-19)... Amount is already in capital gains account.

Request if someone can answer my original question with this details

Aman Verma (209 Points)
Replied 03 September 2020

According to my knowledge under section 54 of IT act we have to purchase a House Property within 2 year of sale or construct within 3 year so you have purchased a House Property and no where in this section it mentions that you have to show the possession papers so just registeration with final amount paid mentioned on that will be sufficient to claim exemption of LTCG under section 54.
Hope it helped