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Long term capital gain

T T Parwani (Others) (86 Points)

28 January 2015

Investing long term capital gain in under construction building.

I have one residential flat & one commercial property .Commercial property is purchased 6 yeras back.

I want to sell commercial property & invest all the receipts in purchase of another residential house in under construction building.Possession of this house will take three years.

Will i be able to save LTCG tax in this case.

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3 Replies

Pawan Bohra (CA by profession ) (61 Points)
Replied 28 January 2015

As per sec 54F(LTCG arising from the Transfer of any capital asset other then residential house) of invested in residential house; If the cost of the new asset is greater than or equal to net consideration then entire capital gain will be exempted from tax provided the time limit for investment if PURCHASED 1yr before or 2 yes after the date of transfer

Pawan Bohra (CA by profession ) (61 Points)
Replied 28 January 2015

And in general the individual must have only one residential house property in its name

T T Parwani (Others) (86 Points)
Replied 28 January 2015

Thanks for reply I want to retain residential house which I already have in addition to above I want to purchase second house after selling commercial property. Will I not get tax exception ? Asper news in economic times dt 12/1/2013 (available on net ) two year period will be extended to three years if building is under construction. Also one can retain old house along with new purchased after selling commercial plot. Please clarify. Regards