Capital gains exemption under sec 54

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

17 August 2013 Dear Sirs,
In Feb,2013 I sold a res. flat gifted to me in july 2009 by my eldest brother in 27,50,000/-(stamp value 29.17 lac).I declared my capital gains as 27,50,000/- as the capital gains calculations were very complicated because the gifted flat was landowner's share of my brother who under a development agreement had given his land(purchased in 1979) for construction of multi storeyed apartment.
Anyway,I with my husband as co-applicant had booked a flat in Noida earlier in 2010 and had paid 40% of the demand money to the builder till date. From out of the sales proceeds I paid Rs 4 lac to the builder before July 31st 2013 directly from my bank a/c .I also transferred the remaining 23.5 lac in capital gains a/c before july 31st,2013.
My questions are
1)Will I get exemption u/s 54 for Rs 4 lac given to the builder directly?
2) Rs 3 lac will remain unutilised in the C.G. A/c after paying all the demands of the builder. So can I utilize the remaing amount in booking another flat and still get exemption under sec 54 for the second flat?
please respond quickly.
THANKS!

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

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

18 August 2013 No the provision of Income tax act do not permit to own 2 houses for claiming exemption. The payment already made to the builder and deposit in capital gain account is allowed as deduction or exemption u/s 54 or 54F.

If you want to own another house and ready to face the complication then the co-owner house is not treated as one house already owned by you and accordingly you can book another house but the capital gains exemption can be claimed only against the first house.

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