capital gain

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gopal (Querist)
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19 May 2011 my clint sold old 10 years old one house prop & commercial shop & purchased both new in same year now as per long term gain house property adjusted ag.new one but shop gain is posible to adj.ag new one shop or exess invest ment in housing property adjustable with shop gain

CA. Aryendra

CA. Aryendra (Expert)
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19 May 2011 As you said you have sold the house property & shop and there is a capital gain on this transaction. It is clear that you can claim the exemption u/s 54 the capital gains arise on sale of residential unit u/s 54.

Just a question on capital gains on shop. As per sec. 54 residential unit means "the income of which is chargeable under the head Income from house property (hereafter in this section referred to as the original asset)". The definition of property u/s 22 means "any buildings18 or lands appurtenant18 thereto of which the assessee is the owner18, other than such portions of such property as he may occupy18 for the purposes of any business or profession carried on by him the profits".

If the shop has been used by you to do any business or profession at the time of sale of the shop then this will be considered as your business asset & not house property. If the same was given on rent to any person for any purpose or is vacant at the time of sale of shop then this will be a part of house property.

And you can claim the capital gains exemption u/s 54 on gains arise from sale f shop. Subject to other conditions contained in the referred respective sections u can avail exemption under sections 54 and 54F for the referred deal.

CA MANOJ GUPTA

CA MANOJ GUPTA (Expert)
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19 May 2011 AS PER S 54 CAP GAIN FROM TR OF HOUSE IS TO BE INVESTED IN A RESIDENTIAL HOUSE'
AS PER S 54F GAIN ARISING FROM TR OF PROP OTHER THAT R HOUSE SHALL BE INVESTED IN A HOUSE
IN UR CASE U SHLD TAKE SHELTER UNDER SECTION 54EC IN RESPECT OF SHOP GAIN

CA MANOJ GUPTA
JODHPUR
09828510543

gopal

gopal (Querist)
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19 May 2011 shop is purely use for commercial use only & i added shop value as a improvement cost which is really spend for renovation and workout gain tax as per indexation this is ok

thanks for reply

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