Lt capital gain on house property

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

30 June 2015 Hi, one of my clients is trying to sell a house a property (land + house) for 100 lacs. He acquired it in inheritance and not sure of its value but estimates to be around 5 lac in 1981. Further to that he did some improvements in 1998 with about another 10 lac.

Now, he wants to sell only 1/3rd of that property now and plans to sell other parts later down the line of 1-2 years.

Questions:
1. Can he claim exemption for selling part of his property?

2. He plans to buy two residential flats which he is going to join from inside. Will that be considered 1 house or 2 house for purpose of exemption?

3. What exemption can he get and for what duration?

4. What happens to other 2 parts of house when he sells them 1-2 years later? Can he again claim exemption? (please note on legal documents his house has not been bifurcated in 3 parts, it is just one)

Amol S Joglekar

Amol S Joglekar (Expert)

30 June 2015 01. Yes, your client may do so if 1/3 portion of the property is SALABLE.

02. for exemption under 54, PLURALITY of the house is allowed..so does not matter even if it is considered as 2 houses

03. The exemptions u/s 54, 54EC can be availed.

04. When your client sells remaining 2/3 portion of his property, the same will be taxed under capital gain, as aforesaid.

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