Long term capital gains

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This query is : Resolved

Mohd Sarfaraz Latibani (Querist)

11 July 2012 I have 2 flat jointly owned by me & my mother from which I am selling only 1 flat. I want to know how to save long term capital gain tax. Whether I can purchase new house and save tax as I already have 1 flat co-owned will this conditioned be ok.

Thanks

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)

12 July 2012 You can invest in a residential house property and claim exemption u/s 54.

The fact that you already own a house will not debar you from claiming exemption.

CA.Sourabh Sethia

CA.Sourabh Sethia (Expert)

12 July 2012 yes you can purchase ane house and claim exemption u/s 54
if
the capital gain arises from the transfer of a long-term capital asset and being a residential house, the income of which is chargeable under the head "Income from house property
the exemption shall be if the amount of the capital gain is equal to or less than the cost of the new asset, the capital gain shall not be charged under section 45; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its purchase or construction, as the case may be, the cost shall be reduced by the amount of the capital gain.

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