Capital Gain and purchase of second House.

Tax queries 152 views 4 replies

vsraj

administration

137 Points Joined March 2014

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.

Replies (4)

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

197908 Points Joined July 2016

1. No restriction.

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

sabyasachi mukherjee

27928 Points Joined May 2017

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.

vsraj

administration

137 Points Joined March 2014

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..