Ltcg - selling old property & buying under-construction flat

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Narayan Subramaniam (Querist)
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21 December 2012 Hello,

I have sold a flat, which I held for about 6 years now. In terms of the Long term capital gains tax, please could you tell me -

1. In how much time do I need to purchase the new property after selling the old one? Some articles list this as 1 year while some say 2 years, which one is correct?

2. Most importantly, if I book a new under-construction flat with full downpayment (using the entire proceeds I have received from the earlier sale), but the flat possession will be received only 4 years from now, does it meet the requirement of IT authorities for taking the LTCG benefit? Basically, does the 1 or 2 year timeline in point 1 refers to physical possession of that property within this time or just the fact that all the proceeds have been invested into another property?

Thanks and please let me know.

Best,
Narayan

Mohit Naithani

Mohit Naithani (Expert)
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21 December 2012 You have to purchase new house property either before 1 year or upto after 2 years for the date of sale to claim deduction u/s 54.

Yes if you paid consideration for under construction flat then its also eligiable to get deduction if construction of such property is complete within 3 years.

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