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Capital gains

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Vijay Hegde

32 Points Posted on 10 May 2013

Hi,

Wanted to understand the implications of sale of 2nd house. I have 2 house (flat)( 1 in which I stay and other in which brother stays). I would like to sell the 2nd house to brother and invest in a new place (underconstruction flat). QuestionsI i have is

1> Will i get exemption from capital gains if the amount(capital gain) is invested in the new underconstruction flat ?

2> The time period for 2 or 3 years given to utlize will be from date of sale of 2nd house ?

3> If sale deed date of new house is before the sale deed date of old house by less than 1 year will that also be eligible for capital gains exemption. In this scenario if the new house gets constructed by 3 years from sale is that ok.

Date of Purchase/Agreement of under construction flat : 1st Jun 2013

Date of Sale of 2nd house : 1st Dec 2013

Date of Possession of new house : 1st Dec 2015

In Summary trying to figure out the right combination to save on Capital Gains Tax.

Replies (1)

Guest

1)Exemption from capital gain is available u/s 54 if the capital gain is invested in the construction of new house, provided the new house should be constructed within 3 years from the date of transfer.

2) The time period of 2 or 3 year will begin from the date of transfer.

3) Yes it will be elgigble for exemption

But, if the amount of capital gain is not utilized before the time of filling of return, then the amount shall be kept in Capital Gain Account Scheme within the time limit prescribed u/s 139(1)