Exemption u/s 54 and 54f

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Naresh (Querist)
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28 December 2013 If the assesse sells the house with in 3 months of its purchase which he has purchased for claiming exemption from long term capital gains u/s 54 and also u/s 54f and reinvest in another house within the one year of transfer of original asset whether he will get exemption under sec 54 and 54f assuming all other conditions are fulfilled. any decided cases wd be of great help.

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

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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28 December 2013 There will be two types of gains to you first was long term which you invested and took the shelter of 54 now within 1 year you have sold and purchased another house. The difference between the sale of 2nd-house and purchase of first house is to be considered as SHCG

@VaibhavJ

@VaibhavJ (Expert)
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28 December 2013 Hi

U/s 54 unit 1 transferred should be capital asset.

So u sold 1st unit & purchased 2nd unit & claimed exemption U/s 54 agst 1st unit.

However u sold 2nd unit in 3 month & purchased 3rd unit.

Since u transferred 2nd unit within 3 years of purchase you wont get benefit of u/s 54 on on sale of first unit & capital gain exempted earlier will be taxable.

Since 2nd unit was held for 3 months it is short term asset & no benefit is available u/s 54 or 54F.

Thanks.

Naresh

Naresh (Querist)
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28 December 2013 the query is as follows . Mr A sold long term land on 15/04/12.He also sold a L T residential house(HN1) on 15/05/12.He bought a house(HN2) on 1/06/12 but sold it again on 1/07/12. lastly he bought another house (HN3)on 1/11/12. He wants to claim LTCG on Land u/s 54F and LTCG onHN1 u/s 54against the purchase of HN3.Tax on STCG on sale n purchase of HN2 are paid .

Naresh

Naresh (Querist)
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28 December 2013 Mr Vaibhav , he has again bought another house ,query is whether exeption will be still available u/s 54 and 54f.

CA VISHNU GAVKARE

CA VISHNU GAVKARE (Expert)
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29 December 2013 no. For claiming exemption sale proceeds of house needs to be invested. in this case sale proceeds of 1dt house is invested in 2nd house which is sold within 3months and sale proceeds of 2nd house are reinvested in 3rd house. hence cost of 3rd house can not be claimed against 1st house. more so ever while calculating capital gain of 2nd house cost shall be reduced by the amount of exemption claimed earlier.

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