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Capital gain query

Mihir (Wealth Manager) (5293 Points)

15 March 2015

An individual sold a property in FY 2014-15 and incurred a LTCG of Rs. 45 lacs.

He purchased a new property in the same FY 2014-15 worth 39 lacs.

Now he wants to sell the new property worth 39 lacs for 40 lacs in FY 2015-16. From that he wants to purchase a land and construct a new house in FY 2015-16, and then claim deduction u/s 54 for constructing a new house only.

How will he be assessed in FY 2014-5 and FY 2015-16?

Thanks

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8 Replies

Intermediate Student (-) (644 Points)
Replied 15 March 2015

For claiming exemption of ltcg, new property purchased should be retain for specific period i.e. 3 year. If assessee sale that propery within that period, earlier exempted ltcg will taxed back in respective f.y. Purchase of land and construct house will not give exemption from ltcg again as it is already set off against purch. of house 39 lac.

1 Like

Intermediate Student (-) (644 Points)
Replied 15 March 2015

Mihir (Wealth Manager) (5293 Points)
Replied 15 March 2015

Thank you for your quick reply.

Mihir (Wealth Manager) (5293 Points)
Replied 16 March 2015

Is it possible to sell the new property and not claim exemption u/s 54 for that, instead construct a new house from the sale proceed of the new property and then claim exemption u/s 54?

Intermediate Student (-) (644 Points)
Replied 16 March 2015

I think that option is better. Claim exemption from ltcg against construction of property and not against pur. of new property.

Mihir (Wealth Manager) (5293 Points)
Replied 16 March 2015

If he sells this new property to construct a new house and claim exemption u/s 54, does he have to deposit the sale proceeds first in capital gain deposit account or normal bank transactions will be acceptable?

Intermediate Student (-) (644 Points)
Replied 16 March 2015

Yes exactly he have to deposit 45 lacs in capital gain scheme a/c to claim exemption form ltcg. And let me clerify that here purchase/sale of new property of 39 have no role in dis calculation bcoz its stcg.

Kakileti Uday Kumar (ArticleD AssistanT) (23 Points)
Replied 29 March 2015

When one person 'A' transfers a property to another person'B'(no family) only with Possession rights(i.e., only usage rights but no right to sale that property).then the real owner 'A' has any right to sell that property in any circumstance or who has the right to sell that property? and if 'B' dies, what is the status of that property?

Anyone plz clarify my doubt and if possible please mention the section of the Act related to my query.....Thank You