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Capital Gains

24 February 2009

Selling my share in property at Chandigarh after April 2009 and investing in another Residential property in Delhi, considering I have the residential flat at Bombay. What if I sold Bombay flat as well and invested Chandigarh and Bombay proceeds on a larger property in Delhi. Will I still be able to avail exemption on CG of both properties?

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5 Replies

Pavan Jain S (Chartered Accountant) (1575 Points)
Replied 24 February 2009

section 54 of the IT Act stipulates that exemption is available provided the capital gains arising from the sale of residential property is invested in other residential property. In my opinion, the exemption is available in the aforesaid case on CG arising on both properties

CA CS VINAYAK PATIL (CHARTERED ACCOUNTANT) (921 Points)
Replied 25 February 2009

Originally posted by :Nishath Firdouse
"	Selling my share in property at Chandigarh after April 2009 and investing in another Residential property in Delhi, considering I have the residential flat at Bombay. What if I sold Bombay flat as well and invested Chandigarh and Bombay proceeds on a larger property in Delhi. Will I still be able to avail exemption on CG of both properties?	"

first u must know how much of money received from bombay(Mumbai) property and then if you invest money more than capital gain then the hole amount you should exempt.

deepak K Gujrati (CA-practice) (966 Points)
Replied 15 March 2009

I also agree to what my precedators have suggested.

Atul Kumar (CA) (504 Points)
Replied 24 April 2009

Agree...

vijay (.) (212 Points)
Replied 25 April 2009

Hi Nishath,

It is not compulsory for you to sell the house at Bambay if the property of chandigarh is a residential house property.

U/S 54 The asset must be a Long term Capital Asset means Should have been held by you for more than 36 months, on the date of Transfer.

If You want ot purchase a property in Delhi you have purchase it with in 2 years after the date of Transfer or if you have purchased any property 1 year before the transfer you can settle it off with the transfer.

If u have to construct a house then you can do it with 3 year.

The amount of Exemption will be

Cost of New Residential House including cost of land OR Capital Gain on the Transfer.

AND if you want to sell your property which is in bombay and want to invest the proceeds of both transfer in a Single property. You can do this it will be exempted U/S 54.

I hope you will find this information useful.

Regards

Vijay