CAPITAL GAINS

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This query is : Resolved

BALA (Querist)

30 June 2009 I OWN TWO APARTMENTS ONE OF WHICH I HAVE DISPOSED OFF RECENTLY.
TO AVOID THE CG TAX, I WOULD LIKE TO INVEST THE CAPITAL GAINS IN THE "CAPITAL GAINS ACCOUNTS SCHEME" WITH SBI AND UTILISE THE AMOUNT EITHER TO BUY ANOTHER APARTMENT OR CONSTRUCT ONE.
MY QUERIES ARE:
1. AM I ENTITLED TO MAKE THE ABOVE DEPOSIT AND UTILISE IT AS PROVIDED IN THE ACT (SINCE I HAVE TWO APARTMENTS).
2. IF YES, CAN I UTILISE THE DEPOSIT AMOUNT TO JOINTLY RE-DEVELOP THE SECOND APARTMENT BY PULLING DOWN THE EXISTING STRUCTURE.
3. IF NO, HOW DO I AVOID THE CG TAX.

NISHIT A. DOSHI

NISHIT A. DOSHI (Expert)

30 June 2009 According to section 54,exemption from capital gain is available in case where new house is purchased or constructed within the specified time limit.
Ans.1 you are entitled to make deposit and u can utilise it as provided in the act.

Ans.2 The words used in section 54 are "new"
so when u pull down your old house,no exemption u/s 54 is available.

with regards,
C.A.NISHIT DOSHI

BALA

BALA (Querist)

30 June 2009 Mr. DOSHI,
THKS A LOT FOR UR IMMEDIATE RESPONSE.
REG UR ANS-2, I WANT TO CLARIFY THAT THE ENTIRE STRUCTURE WOULD BE DEMOLISHED AND A NEW STRUCTURE WUD BE CONSTRUCTED IN ITS PLACE, THUS SATISFYING THE REQUIREMENT OF THE ACT.
WHAT IS YOUR OPINION TO THIS PROPSITION, PLEASE?
BALA