Capital Gain

yes exemption will be allowed.

Originally posted by : Arun Kanunga
	yes exemption will be allowed.

You are not going to get the 54F exemption, if you don't acquire the property by 2013 December.

Because the basic consideration is that the construction has to be completed within 3 years from the date of transfer of the original long term capital asset.

If you violate this provision, the Long Term Capital Gain exempted earlier becomes taxable in the year in which the violation takes place, in your case, the expiry of 3 years from the date of transfer.

You have to be in a position to take possession. 

However IF YOU HAVE ALREADY INVESTED THE NET CONSIDERATION IN THE FLAT, and if the completion of construction is delayed by fault of builder, you will not be denied the exemption . CIT vs RC Sood (2000) 108 Taxman 227 (Del) CIT vs Ms Hille JB Wadia (1995) 216 ITR

as per sec 54

The assessee must have either constructed within a period of at least three years after
the date of transfer or within one year before or two years after that date purchased a house
property for residential purposes. It may be noted that it is not required that the new house
should be used by the assessee for his own residence

So, in my opinion you will not get the exemption...

and plz wait for experts' reply...

Mr. g.k. has captured aspect correctly,

As far as Mr. t.v.s.raghavan's, doubts are concerned 

w.r.t. clause 1, answer is affirmative,

w.r.t. clause 2, answer is negative, subject to facts disclosed,

w.r.t. clause 3, answer is negative, if delay/ default is on part of builder/ constructor,

w.r.t. clause 4, precise interpretation of "Construction or  Purchase" cannot be derived from IT Act, as its a subjective & technical issue, this needs to be addressed in lights of various other laws & Acts & common business practice.

But under routine business transaction, purchase has to be within a period of one year before the transfer or two years after the transfer, or has constructed with a period of three years after the transfer.

Now the construction clause gives room for two interpretations

• Can the construction start before date of transfer.

Ans is affirmative (citation: CIT v. H.K. Kapoor [1998] 150 CTR (All.) 128)

• Can the construction completed before the date of transfer

Ans is negative, Construction completion cannot precede date of transfer (citation: Smt. Shanta­ben P. Gandhi v. CIT [1981] 129 ITR 218 (Guj.))

He will not get exemtion u/s 54F as he is already having Residential Property in his name at the time of transfer(in Mumbai)

Dear Prateek,

Assessee can claim 54F if he does not own MORE THAN ONE residential house other than the house used for claiming the exemption.

This means that at the time of transfer, he can already have 2 houses.

House ONE, which is held by him, as on the date of transfer, acquired more than one year prior to the date of transfer, and

House TWO The second house can be used to claim 54F exemption (if it was acquired within one year prior to the date of transfer of the long term capital asset).