Resale of house built under sec 54 exemption ltcg

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Suresh Roy (Querist)
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17 December 2018 I sold my old house in Sep 2014 and used the long term capital gain of Rs.20L from that to construct a new house. The construction of the new house was completed in time before Sep 2017 and I am currently living there.
Unfortunately, I have to sell the new house as well. So, now how will I be taxed.
I have already taken exemption under sec54. So, I am not allowed to sell the new house before Sep 2020. But if I sell the new house now for say 50L how will the tax be calculated.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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17 December 2018 If the new house is sold before a period of 3 years from the date of its purchase/completion of construction, then at the time of computation of capital gain arising on transfer of the new house, the amount of capital gain claimed as exempt under section 54 will be deducted from the cost of acquisition of the new house.

Suresh Roy

Suresh Roy (Querist)
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17 December 2018 OK, thanks. So, the computation would be like
Old House purchase cost = 800000
Old House sale price = 2800000
Capital Gain on Old House sale = 2000000
New House construction cost = 2500000
New House sale consideration = 5000000
Taxable amount = 5000000 - 2000000 = 3000000
There will be short term capital gain tax on 3000000.
Am I right?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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17 December 2018 Not right.
Old house cost= 25,00,000-20,00,000=5,00,000.
Short term capital gain= 50,00,000-5,00,000=45,00,000.

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Suresh Roy

Suresh Roy (Querist)
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17 December 2018 Thanks. Its clear now. Thanks again.

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