Capital gain exemption??

Tax queries 294 views 7 replies

Swaroop Prasad H S

Student CA IPC / IPCC

49 Points Posted on 24 March 2017

Hello guys..

My aunt is purchasing a new residential property/Land out of capital gains arising from sale of ancestral property. However she already has one residential property in her name which was bought through a loan and past savings.

She has not filed IT returns til date since she is below taxable limit as she is claiming Int. Paid on loan and principal amt u/s 80c of old property in her Form 16. I knw only one residential property exemption is allowed u/s 54 but is der any other way where in this new ancestral property gain can be invested in another property and claim exemption?

While filing returns this year old property's interest and principal wil be shwn in IT return as well as capital gain from ancestral property sold wil be shown. Can't this gain be invested in another property and claim exemption??

Thanks in advance

Replies (7)

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

211715 Points Posted on 25 March 2017

" I knw only one residential property exemption is allowed u/s 54"

Please rectify your assumption. U/s. 54 the condition of 'not more than one property in possession of the assessee' does not apply. If the property sold (ancestral) was house property, you need not worry about the condition as section 54 applies. But if the property sold was other than house property, then section 54F applies, where this condition exists, but there also your aunt has only one property other than sold, so there also no question to worry.

Yes again, she cannot purchase/construct more than one house property to get the exemption u/s. 54 or 54F

Swaroop Prasad H S

Student CA IPC / IPCC

49 Points Posted on 25 March 2017

So no exemption can be claimed in regards to ancestral house property cap gain since she already has one property unless she invests in specified govt bonds

Swaroop Prasad H S

Student CA IPC / IPCC

49 Points Posted on 25 March 2017

So no exemption can be claimed in regards to ancestral house property cap gain since she already has one property unless she invests in specified govt bonds

sivabommakanti

CA - Tax Consultant

267 Points Posted on 25 March 2017

if your ancestral property is a residential property you can claim 54 exemption by investing in another residential property EVEN THOUGH you already own another.

CA VIRAL SANGHVI

Finance head

681 Points Posted on 25 March 2017

Hi,

Agreed with dhirajlal sir, If you purchase a new house than section 54 will apply and under section 54 the assumption of one house will not apply but if section 54 f is applied than assumption of one house is applied but though your aunt has only one house it is no matter of worry.

Swaroop Prasad H S

Student CA IPC / IPCC

49 Points Posted on 25 March 2017

I can claim interest paid and principal paid of old house while filing returns and also show new capital gaind and claim exemption u/s 54.. can both dese be claimed while filing returns C.Y ??