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Capital gain sec. 54

CA. Bhawana Joshi (Co-Founder GST Insights ) (81 Points)

15 June 2011

Mr. X has one House Property in Greater Noida which he has sold in AY 10-11 and has earned a Long Term Capital Gain of40 lacs. He has booked a new flat in Noida in AY 11-12 for 1 Cr and during the AY 12- 13 he has sold another house property in Mayur Vihar from which he has earned a Long Term Capital Gain of 60 lacs. can he utilise both the amount (60+40) for purchase of new property, kindly give reference of case law, urgently?

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4 Replies

U S Sharma (glidor@gmail.com) (21063 Points)
Replied 15 June 2011

as both the properties were held by individual and whole the LTCG is absorbed in new property, he has no bar to avail sec 54 exemption for LTCG for both capital gains.

to make the accounting system valid, he has to get an Capital gain account in any bank where he has to deposit both the LTCG and clear the payment of new property from there only.

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CA ADITYA SHARMA (CA IN PRACTICE ) (16719 Points)
Replied 15 June 2011

Originally posted by : U S Sharma
	as both the properties were held by individual and whole the LTCG is absorbed in new property, he has no bar to avail sec 54 exemption for LTCG for both capital gains. to make the accounting system valid, he has to get an Capital gain account in any bank where he has to deposit both the LTCG and clear the payment of new property from there only.

Mohammad Asif (chartered accountant) (191 Points)
Replied 15 June 2011

yes he can utilize both the amount

(Guest)

What I understand from your query there is capital gain in 2 different FY and u r purchasing a flat in one FY which is again different FY. Can u claim exemption u/s 54 in both the FY.

Before I answer provide me exact date of purchase and sale of property.

My preliminary reply would be that u can claim exemption.