Capital Gain and purchase of second House.

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administration
137 Points Posted on 14 May 2023

Mr.X disposed of his House property for a consideration of Rs.85 lakhs on 10.03.2021..   Capital Gain of Rs. 36 lakhs was deposited in the Bank within the stipulated time under the CAPITAL GAIN A/c.   Within 2 years, on 12th August 2022 he purchased a Flat for Rs. 42 lakhs fully utilising the Capital Gain of Rs. 36 lakhs. His IT returns for the Financial Year 2021-22 ( Assessment Year 2022-23) have been filed and cleared.  It Returns for the Financial Year 2022-23 ( Assessment Year 2023-24) is yet to be filed.

Query: 1.   Whether he can purchase another property in the current Financial Year  2023-24 (Assessment year 2024-25) out of the balance amount with him (after selling the House property mentioned above) and other savings    Is there any restrictions to purchase the second property from the  CAPITAL GAIN point of you.?. 

2. Will the exemption availed u/s 54 ( from paying the Capital Gain Tax) while purchasinf the 1st Flat  will be reversed and treated as short term/long term capital  gain and taxed accordingly.  .   sincerely RajaRaja.  

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On 14 May 2023 at 21:59 Report
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Quick Summary
This discussion explores the capital gains tax implications of purchasing a second property. The user queries whether they can buy another property in the current financial year using remaining funds and savings, and if the exemption claimed on the first property purchase will be reversed. The responses clarify that there are generally no restrictions on purchasing a second property if the first is held for over three years, and the exemption is typically not reversed under these conditions.

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SEO Sai Gr. Hosp.
212535 Points Posted on 15 May 2023

1. No restriction.

2. Not for purchase of new HP, unless the first one is sold before 3 years of purchase.

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On 15 May 2023 at 09:30
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Profession
28271 Points Posted on 15 May 2023
Capital gain account scheme is one option.
It means if u keep ur money in capital gain account. There are other 2 options s.
It's not accepted.
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On 15 May 2023 at 21:22
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administration
137 Points Posted on 15 May 2023

Thank you Sri Dhirajlal ji and SriSabyasachi ji.

Regarding the reply by Sri Sabyasachi ji I am not convinced because while purchasing the First Flat Capital Gain has been fully utilised and the Flat has not been sold. Then where is the question of Capital Gain and keeping it in Capital Gain Account while purchasing the second Flat.   A clarification is required please..

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On 15 May 2023 at 21:53
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Profession
28271 Points Posted on 17 May 2023
Please read sec 54 and sec 54 f
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On 17 May 2023 at 08:28

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