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Capital gain query

SUNIL (INDIVIDUAL) (84 Points)

26 April 2017

Sir

1.I Have sold a house site and got capital gain.

2. But before selling this house site,I Have purchased a residential property from my own funds. Can I say the capital gain arrived from the property sold has been utilized for the purchase of this residential property?

3. Can I utilize the capital gain arrived from the house site sold for purchase/construction of a commerical complex?

Please reply

Thank you.

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2 Replies

Bijin A R (Audit Manager) (51 Points)
Replied 26 April 2017

Hi, Suni !

You can claim deduction us 54F if your purchase of house property was within the period of 1 year before of the date of transfer of capital asset.( Assumed it is long Term Capital Gain)
As per my opinion there is nothing contained in law baring you to invest in commercial complex but the above said deduction will not be available for such investment.

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CS Advocate Abhishek Goyal (M Com FCS LLB M-AIMA ) (13531 Points)
Replied 26 April 2017

To get exemption from capital gains u/s 54F, the net sale consideration from sale of original asset must be invested in purchase or construction of house property within the prescribed time limit. Thus it is required to be shown that you have invested sale consideration in purchase or construction of new residential house property. If you invest the sale proceeds in construction of commercial complex, no exemption will be available to you u/s 54F.

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