Reinvestment of capital gain
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
12 November 2011
please someone explain me about my query.
1. Assessee had earned LTCG on sale of house property-A in the FY 2009-10.
2. Assessee had invested total LTCG in a new house Property-B in FY 2010-11.
3. Now Assessee want to sell House Property-B in FY 2011-12 and with this want to purchase another House Property-C in the same time.
Is this possible as Income Tax provisions says that You should not sell the new house Property-B within a period of three years from the date of purchase.
1. Assessee had earned LTCG on sale of house property-A in the FY 2009-10.
2. Assessee had invested total LTCG in a new house Property-B in FY 2010-11.
3. Now Assessee want to sell House Property-B in FY 2011-12 and with this want to purchase another House Property-C in the same time.
Is this possible as Income Tax provisions says that You should not sell the new house Property-B within a period of three years from the date of purchase.
12 November 2011
Suppose against capital Gains of Rs 8.00Lac , the new residential house property has been purchased for Rs. 10.50 Lacs.
Capital Gain exemption enjoyed is Rs 8Lacs.
.
When before 3 years of its purchase in case the new asset is sold , Cost of acquisition of the new asset is, even though, Rs 10.50 lacs, but section 54(1)(i) states that the cost of acquisition of this new asset will be reduced by the exemption claimed i.e. Rs 8.00 lacs.
.
So if Sales Consideration of the new asset is say 12.50 Lacs, for computing capital gains we have to deduct Cost of Acquisition (10.50-8.00=2.50) lacs.
.
The resulting CG will be 12.50-2.50=10.00lacs.which arises on transfer of a short capital asset.
.
Against STCG no exemption is allowable.
Capital Gain exemption enjoyed is Rs 8Lacs.
.
When before 3 years of its purchase in case the new asset is sold , Cost of acquisition of the new asset is, even though, Rs 10.50 lacs, but section 54(1)(i) states that the cost of acquisition of this new asset will be reduced by the exemption claimed i.e. Rs 8.00 lacs.
.
So if Sales Consideration of the new asset is say 12.50 Lacs, for computing capital gains we have to deduct Cost of Acquisition (10.50-8.00=2.50) lacs.
.
The resulting CG will be 12.50-2.50=10.00lacs.which arises on transfer of a short capital asset.
.
Against STCG no exemption is allowable.
Message likes :
1 times
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- TDS 194-T applicability
- Fixe term employment
- Is any professional CA is here please reply
- GST ITC REVERSE
- Regarding Applicability of Tax Audit u/s 44AB
- Foreign lottery ticket bought online from India: legality, tax and consequences
- Reprocessing of rectification order AY 2025-26
- Section 50-fixed asset-->building ceases to exist
- TDS on TRUST
- Consolidated financials
- Withdrawal in cash from partners capital account by partner
- Regime change
- Goods sold but invoice not issued
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- STATUTORY AUDIT OF A SMALL PRIVATE COMPANY INCORPORATED ON 28.03.2025
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
- How to pay remaining amount of TDS after due date?
- Resigning a auditor from the company for misconduct
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
