Capital gains

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C.A Srivatsan E.K (Querist)

14 May 2008 Dear friends,

I'll put forth my doubt here.Sec. 54 of IT Act is applicable w.r.t sale of a residential property and investment in another residential property.What will be the consequence if a person owning 3 flats with separate door nos. (within the same compound) sells all of them and invests in a single residential property.Also explain the wealth tax perspective of this transaction.
thanking you in advance,
srivatsan

CA Hemant T Dewani

CA Hemant T Dewani (Expert)

15 May 2008 if all theree flats are in one compound & he living in that house then you will purchase another house for capital gain
in wealth tax u/s 2(e)(a) & Sec 5 of the same act one house or 500 sq mt land are exempted from wealth tax & in the above cases your purcasing three houses & residing in the same house only doors are different but in the same compound are not liable to wealth tax

C.A Srivatsan E.K

C.A Srivatsan E.K (Querist)

28 May 2008 thanks sir.Sorry for the late reply.what will be the capital gains impact when the 3 properties within the same compound are sold and the consideration amount is invested in a single residential property? i'm unable to understand the wealth tax impact.pls. elaborate.
thanks in adv.

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