EXEMPTION U/S.54

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R.SATHISH (Querist)

21 March 2008 My friend owns three grounds of land (Ancestral Property). He entered into an joint venture agreement with a builder for construction of houses (Not Flats). He transfers 60% of rights on the land to the builder and gets two separate constructed houses for his own use and some share in cash. He also sold one house through POA to third party with in a span of two years of handing over of the possession by the builder. Now the question is whether the houses constructed through JV agreement can be utilised for climing exemption u/s.54. Whether it is a LTCG or STCG?

CA Hemant T Dewani

CA Hemant T Dewani (Expert)

21 March 2008 when land is transferred to builder it is log term capital gain and you will pay the capital gain when aggreement is made builder give you two house the differenc between transferred price of lan and sales price of bunglow sec 50c is applicable and diffrence is stc that is your regular income and liable under regular slab
sold land cost 500000(transferred price to builder)
sold bungloe cost 1000000
stc rs 500000

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