capital gains..sec 54

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CA Rohit Garg (Querist)

09 March 2011 -house sold in march 2011.
-assessee already paying installments to acquire a flat since 2007 but possession not transferred and title also not transfered.
-whether those installments which are paid and which are still payable be used to claim exemption u/sec 54?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

09 March 2011 The asset being transferred is not a residential house. You may say that what ever is the subject matter -can be said as a right to acquire the property.

Section 54 is available on transfer of long term residential house and period of holding is counted from the date of its acquisition (you may say it from -possession)

Both the requirements are absent in your case. Do not think about S54 in this case.

CA Rohit Garg

CA Rohit Garg (Querist)

09 March 2011 -house1(Long Term) sold in march 2011.
-assessee already paying installments to acquire a flat(House 2) since 2007 but possession not transferred and title also not transfered.
-whether those installments (To Acquire House2) which are paid and which are still payable be used to claim exemption u/sec 54?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

09 March 2011 The New residential house can be purchased 1 year before or 2 years after the sale of the old house.
In this case, if possession is expected within two years from the date of transfer of old house, I do not foresee any problem in claiming Section 54 benefit.

Now question may arise in respect to the installments made prior to 1 year also.

The amount paid earlier as well as paid before 1 year from the transfer is nothing but advance given for booking and in my view all the installments are eligible payments for Section 54, provided within 2 years the possession is obtained.

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