Capital Gain on Sale of NA Plot

Save Share

This query is : Resolved

Quick Summary

If you've sold a non-agricultural plot and purchased an under-construction flat, you may be eligible for capital gains tax exemption under Section 54F of the Income Tax Act. To claim this exemption, you need to deposit the remaining long-term capital gains into a Capital Gains Account Scheme (CGAS) before filing your Income Tax Return (ITR), even if the purchase transaction was completed earlier. The exemption is calculated based on the sale consideration, not just the long-term capital gains.

Vaishali Tillu

Vaishali Tillu (Querist)
Follow

29 May 2024 Sir,
I have sold a Non-agricultural plot in November 2023 and purchased an under construction flat in February 2024. The said flat was registered in February 2024 for full value of consideration. However, since the flat is under construction, payment schedule is divided in to 3 parts – 30%-30%-40%.
1. First installment was paid at the time of flat registration from the long-term capital gain earned on sale of plot.
2. Second installment is likely to be due in August 2024 depending on progress of the building project and will also be paid from the long-term capital gain earned on sale of plot. The entire capital gain earned on sale of plot will be exhausted at this stage.
3. Third installment will be paid out of personal savings.

Request your guidance on below,
I have paid only part of the long-term Capital gain in first installment before July 31, 2024, that is before filling of income tax return, then do I need to transfer the balance long-term capital gain in capital gain scheme account or I can keep on holding these sums in existing bank account till demand is made by the builder, since the purchase transaction at full value of consideration was completed in February 2024 only.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
Follow

30 May 2024 1. You can claim exemption u/s. 54F of IT act.
2. Based on that you can claim the exemption in the ration of sale consideration and not just LTCG.
3. The remaining amount need to be deposited in CGAS account before filing relevant ITR, to claim exemption over it.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
Follow

04 September 2024 Good Luck.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now