Capital gain exemption u/s 54

Thats a good question. I too would like to know the answer.

I had read somewhere that one needs a written permission from the AO in order to close the capital gain account. And I am guessing that capital gain account has a validity of max 3 years, after which the bank will intimate the accountholder to close it.

I do agree with Mihir's reply. One need to take prior permission of A.O. before closing capital gain account.

Suraj ji,

I hold the same opinion. Permission of the AO is required each time of withdrawal; Moreover, to open the said account permission of AO is required. Whenever the any amount is withdrawn the assessee needs to file Form C with the Bank in triplicate, out of which one copy is kept by AO. My point is like this Department can keep record of the assessee.

You will have to take A.O 's permission and same will be added to your income as Income from other sources and tax accordingly...

Section 54 of Income Tax Act,1961 provides exemption to an individual/HUF in respect of LTCG arising on transfer of residential house,if the assessee purchases with 1 year before or within 2 years from the date of transfer,a residential house or constructs within 3 years a residential house.

Can anybody please inform me the exact meaning of PURCHASE and which date is to be considered as the DATE OF PURCHASE to satisfy the above time limits???

Please answer at the earliest.....

The assessee has purchased, within one year

before the date of transfer

or two years after the date of transfer or

constructed within three years after the date of transfer