Section 54F says that Capital Gain from sale of Original Asset (Plot of Land) is exempt from Tax if a New Residential Property is PURCHASED within ONE YEAR BEFORE or TWO YEARS AFTER the sale of Original Asset.
In the above provision, whether the word PURCHASE Means completed purchase or incomplete purchase?
for example, A vacant plot of land is being redeveloped and the total consideration to be received is Rs 50 (No flats are to be received). The redeveloper is going to pay Rs 5 per month upto Nov 14. the land owner intends to invest the same in a residential house. He has approached number of housing projects and they require full payment latest by May 14. The New Flat Costs say Rs 55, and the Land Owner gets say Rs 30 from the Redevelopment upto May 14. He arranges Rs 25 out of his savings or personal loans and pays for new flat in full. (that means the Reinvestment procedure is complete) Then the land owner gets remaining Rs 20 from the Redevelopment between Jun and Nov 14.
Can he claim Capital Gain Deduction of Rs 20 against repayment of Loan taken for purchase of New Flat?
What will be the date of transfer of ownership of land (As per Income Tax Act provisions)?
- date of redevelopment agreement
- date of receipt of full & final Consideration
- date on which 7-12 extracts entry is done in the name of Apartment/ Society
Pl suggest related case laws, if any.. thanks in advance..
CAclubindia
