Capital gain

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

23 August 2011 1.I have sold some Land and Building not a residential house, Long term capital gain has arised in order to claim exemption:-

My father has some portion of land on which already construction is started and almost 80% complete and One consultant suggested that:
i)Take land as gift from father.
ii)And pay the cost of construction till date.

My question is whether i can proceed as per consultant view or there is some other way, so what is the other way to get exemption under capital gain

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

23 August 2011 The act requires that construction should be completed within 3 years.
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In that way, payment of construction expenses to father will amount to incurring the expenditure on construction and as such you can claim exemption U/s 54F. The remaining work will be completed by you.
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You can purchase the land with construction work on "as & when basis" and get it completed if father do not desire to gift you the land.
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You can also claim construction only in your name by getting a written agreement
registered as an NOC to you.
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Purchasing option may be better to adjust the capital gains .....as by selling the land at higher cost or at market price to you , your father may also purchase another residential house in case his land is Long Term Capital Asset.
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