Capital gain on sale of property

  X has a vacant plot of 2400 sft and also owns a flat of 900 sft a different place.  X wants to sell the vacant land and reinvest major portion of the sale proceeds in acquiring a flat to be constructed by Y and invest the balance in CG bond.   Applying  the stipulation “Assesse should not own more than one residential house prior to this investment.” whether X is entitled to avail CGT exemption on the amount to be reinvested for acquiring another flat ( Considering the fact that X owns a vacant land and also a residential flat now - when  land is treated as an asset " other than residential house" 54F and excluded from 54 )

Replies (3)

" whether X is entitled to avail CGT exemption on the amount to be reinvested for acquiring another flat ( Considering the fact that X owns a vacant land and also a residential flat now "

Yes Eligible u/s. 54F

The law says that the assessee should not own more than 1 residential house on the date of transfer of the original asset.

In the above mentioned case, the assessee only owns 1 residential house of 900 sq ft on the date of transfer of the plot and therefore, exemption under Section 54F would be allowed.

  1. For calculating the CGT , whether indexed cost of acquisition and improvement can be applied for sale of land under 54F
  2. If improvement can be deducted :

The plot was purchased before 1990 and what are the types of expenses allowed as cost of improvements till 2001 and after 2001?   (Whether he can claim exemptions for the expenses for fencing (2 times), periodic maintenance of the plot, construction of compound wall, incidental charges , stamp duty for reinvestment in new flat etc)

 

  1. Supposing, X opts to execute Settlement deeds in favour of his wife and daughter – On sale of land by the Settlees –   If reinvesting in the construction project of Y is done by one of the settlees and CGT exemption claimed on the value of flat to be allotted;  Whether the other settlee can also claim exemption by investing her share in the Capital Gain Bond or another flat?

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
08 October 2026
SALES TELECALLER

HIRE NOVA

Lucknow

Graduate (Any)

View Details
Company
08 October 2026
Accounts and Tax Associate

POOJA R TELI & CO

Pune

CA Inter

View Details
Company
08 October 2026
Account Executive

Elite Taxation

New Delhi

CA Foundation

View Details
Company
16 October 2026
CA article trainee

Zerdi & Co. Chartered Accountants

Pune

CA Inter

View Details
Company
13 October 2026
Accountant

Zerdi & Co. Chartered Accountants

Pune

B.Com

View Details
Company
06 October 2026
Assistant Manager - Audit and Compliance

Ravi K Jain & Co

Noida

Others

View Details
Company
12 October 2026
AUDIT , ACCOUNTS AND TAXATION

KDSS

New Delhi

B.Com

View Details
Company
ARTICLESHIP 07 October 2026
Article Assistant

Malhotra Rajesh & Associates

New Delhi

B.Com

View Details