Capital Gain

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Nisha (Querist)
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17 March 2010 Hi.. Can anyone help in the following case?

Assessee has sold Residential house on which LTCG is applicable.
Now from the sale proceeds of this house, he wants to construct additional floor on his existing house.
But construction will take more than 1 year... so is the assessee required to transfer the sale proceeds to Capital Gain account scheme?

Also if after indexation, if there is no LTCG, then also is assesse required to transfer the money to Captal Gain A/c scheme?

Please advice....

Zeeshan

Zeeshan (Expert)
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17 March 2010 1.For the Construction of New house or addtion the limit is 3 years and not one year. However for this period you have to deposit the amount into Capital Gain Account.

2.If after Indexation, there is no Capital Gain, i.e. no amount is taxable in the hands of Assessee. As there is no taxable gain is there, the sales proceeds are not required to be deposited in the Account.

CA Ashok Kumar Sahu

CA Ashok Kumar Sahu (Expert)
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17 March 2010 agree with expert

Nisha

Nisha (Querist)
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18 March 2010 Can u pls forward me any case law, or text in the ACt where it is mentioned that if after indaxation, there is no profit then the amount may not be transferred to Cap. Gain A/c.

CA Ashok Kumar Sahu

CA Ashok Kumar Sahu (Expert)
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18 March 2010 you check sec 48 of IT act for your reference

CA Ashok Kumar Sahu

CA Ashok Kumar Sahu (Expert)
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18 March 2010 https://law.incometaxindia.gov.in/TaxmannDit/DispCitation/ShowCit.aspx?fn=https://law.incometaxindia.gov.in/DitTaxmann/IncomeTaxActs/2009ITAct/section48.htm

check above link for related sec. 48

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