Long term capital gain exemption

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

19 September 2014 Case is given below:

Mr. X bought a residential house A in FY 2003-04 and sold the same during FY 2014-15. The net result of sale and purchase is LTCG. What are the options available to get rebate on LTCG tax. Assessee has distributed Sales proceeds in two parts to be used as follows:

1. He purchased a commercial property with part of the proceeds.

2. He is planning to pay outstanding amount of an under construction residential property - of which part payment was done in installments over the past two years. Developer is expected to complete the construction and hand over the property in next 1 to 2 years time frame.

Will Assessee be able to claim LTCG exemption on either of two investments, if yes how much. if no, what are the options available to him to utilize the proceeds left after purchasing commercial property.

Thanks.

Nikhil Kaushik

Nikhil Kaushik (Expert)

20 September 2014 first of all compute the LTCG.

If the amount paid for the under-construction house is equal to or more than LTCG, then you will get full exemption. But no exemption should accrue from commercial property investment

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Querist : Anonymous

Querist : Anonymous (Querist)

20 September 2014 Thanks! but does it make any difference that partial payment for under construction property has already been made more than 1 year ago.
Also, what if developer does not complete the construction and hand over the property in next 1/2/3 years.

What are the other options available to invest the money for LTCG exemption.

Nikhil Kaushik

Nikhil Kaushik (Expert)

20 September 2014 it wont make any difference. But yes the house should be completed within 3 years

alternatively, you may invest in bonds under section 54F

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