17 June 2023
I have a scenario like this. I have stocks as RSU in US and they vested in 2010-2019. these stocks I sold then partially in 2019 and I invested that amount in buying a house A. I also had a house B in my name which I sold and re invested that amount in another plot to construct a house C. I did a gift deed to my wife for house A in 2023.
In 2023 again I have bought a plot to construct a house. I have the above stocks left as RSU in US and I want to sell them and use that money to pay for the land and construct a house D. So as per section 54 can i avoid capital gains tax on the amount after selling those shares as I am investing that in construction of a house D
I only have plot C in my name as I have gifted the house A to my wife and will own plot and house D now.
17 June 2023
Yes, you can claim exemption u/s. 54F of IT act as per present scenario. But your exemption, if claimed over house B needs to be rechecked.
17 June 2023
Dhirajlal sir, what's has to be checked for exemption over house B? House B is sold and another C is only in my name as house A is gifted to my wife. I have only house C in my name.
As per sec 54F I can have 1 house in my name and I can claim exemption for the new house D
17 June 2023
1. Whether you had claimed any exemption u/s. 54 when you sold house B? 2. I repeat, as per available situation, you are eligible for exemption u/s. 54F.
17 June 2023
You are misguiding the facts and that may results wrong solutions. In your query you say that you purchased plot C TO CONSTRUCT a HP. In your one of the replies you say that it is not constructed yet, remained as plot C; which you changed to house property C. Better consult your local CA with correct data to get correct advice.
17 June 2023
Sorry for not being clear, plot C is house property only its under construction and also I have time of 3 yrs from the date of purchase of property to construct. I have not said plot C is not constructed. Is house under construction not treated as HP?
Anyways treating HP C in 2023 is under construction , in this scenario, can I get exemption by selling stocks RSU and investing it to buy another plot to construct a house. I would like to mention here plot C house is in faridabad and plot D, which I want to purchase and build a house is in chennai
17 June 2023
Tentatively, I would say that the exemption claimed under sec. 54F in 2019 were reversible, as you started constructing house C within 3 years of sell of the original asset.
17 June 2023
Sorry I did not understand why its reversible, can you point me to the statement under that clause which says that. The funds from selling the house are being used to construct the house .
As per the statement I ready for section 54F " To claim the exemption, the sale proceeds should be used in the following manner To buy a new residential property one year before the date of sale of the asset To buy a residential property within 2 years from the date of sale of the asset To construct a residential property within 3 years from the date of sale of the assets"
17 June 2023
You have defaulted section 54F IT act, which you claimed in buying house A, against constructing another house C within 3 years of purchase of A !!
17 June 2023
Ok so what year is considered as 3 yrs of construction the date starting of construction or ending of construction? I was told by a CA its when you occupy the HP is considered , its quiet open ended
18 June 2023
You are confusing yourself; House C is under construction or completed in 2021. I once again repeat, consult your CA for the query, and follow his/her instructions.
18 June 2023
House C is still mot completed yet, will consult, but my question of "So as per section 54 can i avoid capital gains tax on the amount after selling those shares as I am investing that in construction of a house D", can you please kindly explain?
CAclubindia
