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Query on capital gain

ashwani (CA) (72 Points)

09 February 2013

I have sold a residential house on 2/02/2013(i.e date of registration) but its agreement was made 1 year back i.e 5/01/2012 and i also has purchased a residential house on 28/02/2011 .So my question is can I claim the benefit U/S 54

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Eshita Shah (Assistant Accounts Manager) (26 Points)
Replied 09 February 2013

Hi,

The data given by you is as follows

Sale agreement date-05/01/2012

Date of registration- 02/02/2013

Date of purchase of new house- 28/02/2011

Under Section 2(47) transfer includes part performance of a contract as specified u/s 53A of Transfer of Property Act. Which means that if consideration is recieved and posession is transferred on 05/01/2012 then it shall be taxable in the FY 2011-2012 even though registration is complete only next year.

SO if you have held the house for more than 36 months the gain/loss shall be chargeable as LTCG/Loss. ie [Sale- Indexed Cost of Acquisition]

Now to claim exemption under Section 54 the conditions to be satisfied are

Asset Transferred should be a Residential House Property

Nature of asset should be Long Term

New Asset acquired should also be a Residential House Property and it should be acquired either within1 year before or two years after the date of transfer.

Since your date of transfer is 05/01/2012 and you have acquired the new house within 1 year (05/01/2011 to 05/01/2012) ie on 28/02/2011 u are eligible to claim exemption under section 54. The amount of exemption under Section 54 shall be the amount invested on new house or capital gain whichever is lower. The new asset should be held for a period of 3 years from the date of acquisition.

Now if u have not considered the above income while filing ur Return for the year 2011-2012 u need to revise ur return ie by 31/03/2014. A return can be revised only if you have filed ur original return on time.

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ashwani (CA) (72 Points)
Replied 10 February 2013

Originally posted by : Esh*ta Shah

Hi,

The data given by you is as follows

Sale agreement date-05/01/2012

Date of registration- 02/02/2013

Date of purchase of new house- 28/02/2011

Under Section 2(47) transfer includes part performance of a contract as specified u/s 53A of Transfer of Property Act. Which means that if consideration is recieved and posession is transferred on 05/01/2012 then it shall be taxable in the FY 2011-2012 even though registration is complete only next year.

SO if you have held the house for more than 36 months the gain/loss shall be chargeable as LTCG/Loss. ie [Sale- Indexed Cost of Acquisition]

Now to claim exemption under Section 54 the conditions to be satisfied are

Asset Transferred should be a Residential House Property

Nature of asset should be Long Term

New Asset acquired should also be a Residential House Property and it should be acquired either within1 year before or two years after the date of transfer.

Since your date of transfer is 05/01/2012 and you have acquired the new house within 1 year (05/01/2011 to 05/01/2012) ie on 28/02/2011 u are eligible to claim exemption under section 54. The amount of exemption under Section 54 shall be the amount invested on new house or capital gain whichever is lower. The new asset should be held for a period of 3 years from the date of acquisition.

Now if u have not considered the above income while filing ur Return for the year 2011-2012 u need to revise ur return ie by 31/03/2014. A return can be revised only if you have filed ur original return on time.

Hi Esh*ta thanks for your reply ,i want to know that it is necessary to receive full consideration at the time of agreement as i had received only small amount at the time of agreement ...