Capital Gain on Residential Property

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Guest

Guest (Querist)

27 June 2011 Dear Sir,

I sold a house on 20th june, 2011 in on which i am getting a LTCG of Rs. 15,00,000/- (After Indexation).

I have another flat for which I have been giving advance since last 3 years.

The new Flat has not been registered in my name till date.

In which manner can i take the benefit of Exemption u/s 54?

1.Can I take the benefit of Advances Given 3 years back U/s 54 Exemption??

2.Or only the Advance of Last year?

3.Or only the amount which I will be using for Registration and Payments post registrations?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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27 June 2011 Q-1. Can I take the benefit of Advances Given 3 years back U/s 54 Exemption?

Ans : NO

Q-2.Or only the Advance of Last year?

Ans : Yes

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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27 June 2011 3.Or only the amount which I will be using for Registration and Payments post
registrations?

Ans: Amount paid one year before and two years after the sale of the original asset.
will be eligible for exemption.

However, before the return filing date i.e. 31.07.2012 , you have to keep the unutilised amount of capital gain, in capital gains A/c with any nationalised bank.

Guest

Guest (Querist)

28 June 2011 Thank you very much sir for the prompt reply.

Sir, Incase if I am making furniture there in the new house , will the money used for making furniture can be claimed as Exemption U/s 54.?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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28 June 2011 In my view, what ever is essential for making the house inhabitable only , is included in construction cost.

Even though wooden doors and windows can be classified as furniture , but without it the
house can not be said to inhabitable and such cost of these items can be added to construction cost. But amenities like Sofa, Rakes or other furniture are separated from construction.

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