Section 54 of i.t.act

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CA Sanjay Baheti (Querist)
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19 June 2012 One of my client being an Individual has taken benefit of Long Term Capital Gain exemption under said section in F.Y.2008-09 relevant to Asst.Year 2009-10 in Statement of Income by way of Investment in new Residential Plot/Building.Now query is whether this Plot/Building can be sold in
F.Y .2012-13 & whatever gain as long term can be exempted again under Section 54 of I.T.Act by investing entire sale consideration in another new residential Building/plot within stipulated period as per law.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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20 June 2012 1. The asset purchased should not be sold within 3 years of purchase.
In your case, since 3 years have expired, the asset can be sold. There will be no implication on the original LTCG.

2. Since the period of holding of this plot/building is more than 3 years, it is a long term capital asset and LTCG will arise on sale of such asset.

Exemption u/s 54 can be availed against such LTCG.

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