Capital Gain - Urgent

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SURESH KUMAR.P (Querist)
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15 December 2009 I have made reinvestments in residential house twds fund arising from the transfer of the original asset. Relief for rollover of investments asset as per Act is reinvestments made before 3 years from transfer of original investment asset and 1 year as per New Direct Taxes Code. I have paid full amount(Cost) of residential house to X construction company within 3 year (as per Act) & 1 year (as per Code) before the beginning of the financial year in which the transfer of original investment asset was made. But in case the residential house to be built by the X contribution company is not completed within 3 years or 1 year as case may be and not handed over to me, Am I eligible for relief for rollover of investments asset? In other words can you please clarify whether I am still eligible for relief for rollover of investments asset even if the work is not completed? Is it enough if i had made the investment, in financial year and don't worry about the completion of construction? Please advice? Thanks in advance

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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03 January 2010 1. Direct Tax Code is not a law presently.
2. In Indian Income Tax Act,
A Rollover=transfer
B Investment Asset= Capital Asset
C Relief for A+B =Exemption U/s 54F
3. Prescribed period of Investment-
A. For Purchase of a new house:
1 year before and 2years after the date of transfer.
B. For Construction of a house: within 3 years after the date of transfer.
4. Amount to be invested in the new house:
The consideration received on sale of original asset and not merely the capital gains.
5.Completion of the construction work:
Not of much relavance.Expectation sought by the law is payments must be made by you or the amount should have been invested.

Please go through above and get yourself assured.

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