Tax on short term capital gain

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This query is : Resolved

Rakesh Khandelwal (Querist)

17 May 2016 My father in law gifted a land to my wife. I sold it within 2 month. If she invest the amount received from the sale of this land in a house property. Will it be exempt from capital gain tax ?

Amol S Joglekar

Amol S Joglekar (Expert)

17 May 2016 the period of holding shall be counted as that from your in law. So, if it is more than 36 months, it will be long term. and then exemptions will be available

Rakesh Khandelwal

Rakesh Khandelwal (Querist)

17 May 2016 Dear Amol,
As I mentioned I sold it within 2 month from the date of Gift. It is not a long term capital gain.
If The amount is invested in a house property will it be exempt from deduction in capital gain tax.

Chintan B. Vasani (CA , DISA)

Chintan B. Vasani (CA , DISA) (Expert)

17 May 2016 Dear Rakesh,
The period of holding in case of any capital Asset received by way of gift from relative, and subsequently if sold then period of holding should also include when the previous owner acquired such capital Asset, as mentioned u/s 2(42A) of the Income Tax Act, 1961 read with section 49(1). Hence in your case period of holding of your Father in law is also to be included.
If such period exceeds 36months then you can claim exemption u/s 54F of the Income Tax Act, 1961.
If you have any further querries you are most welcome.

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