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Ltcg (Income Tax)

This query is : Resolved

( Author )
05 July 2012

I am selling a house next month, purchased in 2006, I am getting a long term capital gain of Rs.10 lakhs, I want to know how to claim exemption. As I will buy a new house next year.

Thanks

HRIDAYNATH PATRA

( Expert )
06 July 2012

Long term Capital Gain on transfer of residential house would not be taxed in the following conditions:-
1) within a period of one year before or two years after the date on which the transfer took place purchased a residential house;
2) within a period of three year after the date on which the transfer took place constructed a residential house.

In the above cases, the cost of purchase or construction of the new house should be more than the long term capital arises. Otherwise, the differential amount wuld be taxed.

As you are going to purchase a new house in the next year, your long term capital gain would not be taxed privided the cost of the new house is more than Rs. 10 lakh (as you said you capital gain is 10 lakh.

CA Urvish Sanghavi

( Expert )
06 July 2012

Sir,
You can claim deduction u/s 54 of the Act.
On selling of the New house if you purchase a new house within 1 year before or 3 years after the date of sale, the amouunt to the extent of the new house purchase is allowed as deduction u/s 54 of the Act.

Therefore if the purchase value of the new house is more than Rs. 10 lakhs then the entire capital gain is exempt.

Mohd Sarfaraz Latibani

( Author )
06 July 2012

Thanks for your replys, Do I need to deposit the LTCG amount in any capital gain fund till the time I purchase a new house or I can keep it in my bank A/c.

Thanks

CA Urvish Sanghavi

( Expert )
06 July 2012

If the due date if filling of return is coming in between the transaction of sale and purchase, then you need to deposit the same in the bank account, otherwise not.

Mohd Sarfaraz Latibani

( Author )
06 July 2012

I am selling in the month of July 2012
and I have not filed my return for the last year.

Thanks