LTCG from sale of property and brought new property

Tax queries 216 views 8 replies

Jalaj Karandikar

14 Points Joined September 2021

Dear all,

I am a tax payer and proud citizen, I have a query and request guidance and help.

I brought a property in 2008 and sold in Mar'19, profits from this was parked in a LTCG account in Aug 2019.

I brought a new property in 2020, but I didn't realize that I can pay from that LTCG account, I have paid from my saving account. So far I have paid₹14lacs, the recent installment was paid from LTCG account, this account getting expired in Aug '22.

Need guidance on

1. Can I claim benefit of INR 14Lacs paid from saving account from LTCG account.

2. Remaining account will default become taxable or I can use for the new property.

Thank you

Jalaj Karandikar

Replies (8)

Mahesh Shah

2349 Points Joined July 2017

Please ref sec 54 of income tax
SB ac benifit can not be claimed
see conditions applicable in sec 54 of income tax act

Jalaj Karandikar

14 Points Joined September 2021

My view, if someone wish to but property in township project, in such case 3 years is to short time. is there a forum to raise this as a concern to avoid last minute issues in returns or tax related issues.

pls guide

Aanchal Aggarwal

76 Points Joined February 2022

Hi Sir,

In my opinion, as per the provisions of section 54 of Income tax, the LTCG that you used correctly by depositing in Capital gains account should be utilized within

2 years of selling the property (2 years from March 2019) if buying new

3 years of selling the property (3 years from March 2019) if constructing new

Since it was not utilized within the time frame the balance of the account will be added in your taxable income.

So to answer your query

1. No, money used from Saving bank account will not be considered for deduction

2.The amount in the capital gain account will default and will be taxable

Jalaj Karandikar

14 Points Joined September 2021

Thank you Mam for detailed response this helps.

one last query, is there any door left where I can reach to seek help on

Point No 1 (by showing all evidence that I made payment to builder).

Aanchal Aggarwal

76 Points Joined February 2022

Sir,

you can try meeting your assessing officer by carrying all the necessary documents or talk to your trusted chartered accountant regarding the same.

rama krishnan

12244 Points Joined May 2017

1. yes, you can claim. the only condition to be satisfied for claiming deductions under section 54 is that the entire capital gains to be invested within in the prescribed time. source of the payment is immaterial

2. the amount lying in the CGAS can be used to make payments towards new property

Jalaj Karandikar

14 Points Joined September 2021

Dear Rama Krishnan ji,

One clarity on point # 1, are you indicating that money paid to builder from saving account instead on LTCG a/c can be claimed to get LTCG tax benefit.