Capital gains
This query is : Resolved
10 May 2012
Kindly advise if sale proceeds from LTCG on sale of residential owned property can be used to acquire a tenancy flat as presently even pugree / pagdi proceeds are deemed to be capital receipts and subject to tax.
My client recently sold residential property. Now he wants to purchase tenanted property out of the same proceeds of residential property. Is this allowed as a set off allowed u/s 54. Are there any case laws in this regard
My client recently sold residential property. Now he wants to purchase tenanted property out of the same proceeds of residential property. Is this allowed as a set off allowed u/s 54. Are there any case laws in this regard
chaitanya cherukuri
(Expert)
10 May 2012
What do you mean by Purchasing Tenancy Flat. Explain it Properly.
CA CS Amit S. Kedia
(Expert)
10 May 2012
Yes,
It is allwed to claim the exemption under section 54, the requirement is to purchase a house whether it is tenanted or not.
Hence, even if it is purchased from a tenant which has occupied it under pagdi system, the exemption can be given.
Thanks
It is allwed to claim the exemption under section 54, the requirement is to purchase a house whether it is tenanted or not.
Hence, even if it is purchased from a tenant which has occupied it under pagdi system, the exemption can be given.
Thanks
CA CS Amit S. Kedia
(Expert)
10 May 2012
Mr. Chaitanya,
In Pagdi system, the entire building is owned by a single person or on co-ownership basis.
The tenants are legal occupants of the flats in the building, they pay monyhly payment(Electricity, rent, etc) to the owner of the building.
The tenants are the owner of the flats/property occpied by them but they do not execute a deed for conveyance but less amount is paid in lumpsum initially and thereafter rent is paid month to month basis.
In Pagdi system, the entire building is owned by a single person or on co-ownership basis.
The tenants are legal occupants of the flats in the building, they pay monyhly payment(Electricity, rent, etc) to the owner of the building.
The tenants are the owner of the flats/property occpied by them but they do not execute a deed for conveyance but less amount is paid in lumpsum initially and thereafter rent is paid month to month basis.
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