Sec 54

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

04 June 2015 I have sold a residential house from which there was a capital gain,I have invested the capital gain in a plot to construct a new house, but after 6 months I found the land was not suitable to construct house because of passing sewerage or drainage line and because of its foul smell it was not suitable place to live there. Hence, I sold the plot back at same cost price on which I purchased earlier and again invested the capital gain amount back in another plot to construct new house.

all these things have occured within 2 years from the date of sale of residential house.

though sec says not to sale new asset before 3 years, but if assessee is facing genuine problems, than what is the solution available to the assessee in above case.
Is there any case law that supports above case

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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04 June 2015 It is only the residential house you bought or constructed should not be sold within 2/3 years. If you construct the house within 3 years on the new plot purchased you will be complying with the requirements of section 54.

Querist : Anonymous

Querist : Anonymous (Querist)

04 June 2015 so purchasing of new asset and then selling the same will not affect the condition?......condition is just that one should buy or complete construction of new house within the time period?????

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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04 June 2015 It is my view other experts may give their view, where different view is possible.

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