Ltcg

Tax queries 174 views 7 replies

ramesh agrawal

business

179 Points Joined July 2010

I am selling a major part of my property which includes a residential house, other commercial and residential property which is given on rent and some vacant land. The remaining property is only some vacant land.

1. Can I purchase two residential houses(including land cost on which house is situated) to save LTCG or am I eligible to buy only one residential house to save LTCG?

2. Is it true that the deducted LTCG becomes taxable if I purchase a third house within 2 years (or construct third house within 3 years) of sale of original property?

Replies (7)

CA Saba Naaz

Chartered Accountant

8487 Points Joined August 2010

Under both the sections,i.e., 54 & 54F.. the condition is to purchase one residential house property. Cost of the land is integral part of cost of residential house.

CA Saba Naaz

Chartered Accountant

8487 Points Joined August 2010

And deducted LTCG becomes taxable in case of purchase of another residential house within 2 years or construction of another residential house within 3 years u/s 54F.

CA Saba Naaz

Chartered Accountant

8487 Points Joined August 2010

For exemption u/s 54F, after purchase or construction of one house before the due date of return, the assessee can still deposit the amount under capital gain scheme.. which can be for additional made to that house only.

ramesh agrawal

business

179 Points Joined July 2010

Is the purchase of one residential property clause for LTCG exemption apart from one existing residential house OR we need to have only one residential house in total whether old or new.

CA Saba Naaz

Chartered Accountant

8487 Points Joined August 2010

Sec.54F exemption is available only when assessee does not own more than one residential house on the date of transfer of original asset, exclusive of one purchased for claiming exemption under this section.