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Long term capital exemption query

25 June 2018

is there any provision under the act,
for exemption if land is sold, and the sum availed is invested in new property but the assessee already has two properties and a period of six months has been elasped

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6 Replies

kanamarlapudi venkatesh (articles student) (113 Points)
Replied 25 June 2018

purchase agricultural land and claim deduction u/s 54B

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Ruchika Somani (Coaching and Practice in Tax Audit Law.) (4429 Points)
Replied 25 June 2018

Yes, u/s 54F, provided assessee fulfills below mentioned conditions :

1.Gain is Long term

2.Land sold is not Agricultural Land

3.Assessee purchase ONE house within 1 yr before the date of transfer or 2 yrs after or construct ONE house within 3 yrs after the date of transfer.

4.Assessee do not sell this house within 3 yrs of purchase or construction

5.This new house purchased or constructed must be situated in India

6.Assessee should not own more than 1 residential house (other than the new one) on the date of transfer

7.Assessee do not purchase within a period of 2 yrs after such date or construct within a period of 3 years after such date any residential house (other than the new one).

When Assessee satisfy these conditions and invest entire sale proceeds towards the new house – he/she won’t pay any tax on gains. However, if he/she invest a portion of the sale proceeds, the exemption will be the proportion of the invested amount to the sale price or exemption = cost of new house x capital gains/net consideration.

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