Property Capital Gain

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ajay r parikh (Querist)

08 December 2023 Date of purchase of unger construction property 1 is Aug 22. If I sell Property 1 in Sep 24 (i.e. more than 24 months) will this be considered under long-term capital gain & can I reinvest this capital gain in under construction property 2 (date of purchase Nov 23, possession date: Dec 27)?

Construction project investment: Capital gain can also be invested in a construction project. However, the construction must be completed within three years from the date of the sale to avail the exemption. If not completed within this period, the exemption will be revoked, will this clause be applicable as the possession of the 2nd property is beyond 3 years of date of sell of property 1?

Please Reply me Sir

CA. Bhavik P. Chudasama

CA. Bhavik P. Chudasama (Expert)

08 December 2023 Jaimal K Shah, Mumbai Vs Department Of Income Tax – On 19th April, 2012, the Bombay Tribunal has held that an under-construction flat booked with a builder, under a letter of allotment or an agreement to sale, only represents the right to acquire a flat and if such right is sold after a holding period of more than 24 months, it becomes a long-term capital asset.

based on above judgement you can consider your under construction property as Long Term Asset but you should have allotment letter with agreement to prove the same and for

Second question your Property should have been completed/ready to move within 3 years of date of purchase to claim exemption under 54F

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