Capital gain one year before selling the house

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Pramod Mishra (Querist)

28 April 2013 I have a four years old flat and would like to purchase another bigger under construction villa from a builder before selling my first property. I know one can save tax on capital gain by investing the sale proceeds in another residential property either one year before selling the house or two years after the sale. Let say I book my 2nd house on 1-June-2013 and agreement with builder as 1-July-2013 and registration (i.e. sale deed) is happening on 1-July-2014 and possession on 1-Nov-2014. While considering criteria “one year before selling the house”, which date of 2nd house needs to be considered? Is it booking date or agreement date with builders or registration date or possession date?

Shivang Chokshi

Shivang Chokshi (Expert)

29 April 2013 your agreement with the builder will be termed as the date for considering the purchase of property.. in certain cases, one can use the sale deed as the date of investment also as if any litigation problems arise in scrutiny, there are case studies where sale deed is used as date of investment for purpose of capital gain..

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)

11 June 2013 The provision of Section 54F are very much clear that you have to first sale and then invest. The time limit arises only when you deposit the money in the serrate bank account. If you do not do so then it is treated s 2nd house and no benefit is available.

Thew expert is correct for other issues.

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