Capital gain

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t.v.s.raghavan

t.v.s.raghavan (Querist)

24 April 2010 Mr A has sold a piece of land at Ghaziabad for Rs1.00 crores in December 2009.This land was purchased by him from Ghaziabad development authority on instalment basis the last instalment was paid on 3 11.2002.The land was registered in his name on 15.11.2002.Mr A has opened a capital gains account and deposited the entire amounton 30th December2009.Mr A has booked an underconstruction building on 15.12.2009.The first instlmentof Rs 7 lacs paid from his own sourcessavings.When the amount was deposited, he has transferred this amount to his S.B.Account.Two instalment of Rs 8 lacs also paid by him through capital gains account.The total cost of the flat is Rs1.25 crores.The builder has informed now that the possession will be possible only by middle of 2014. The question is whether the assessee is entitle to avail 54f benefit and if further delay occurs in securing the possession whether he will be denied of this benefit?

CA. RAJESH Kr. MAURYA

CA. RAJESH Kr. MAURYA (Expert)

25 April 2010 As per Act, the benefit u/s 54F is available, if you purchase before 1year or within 2 years from the date of transfer. OR you construct within 3 year from the date of transfer.

Only thing needs to clarify is that whether booking of flat from a builder amounts to purchase or not. As per my view, as soon as you undergo an agreement to purchase, it is deemed purchase. So, you will be benefited with this exemption, keeping in mind other conditions that how much you invest, more or less of your net consideration amount.

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