CAPITAL GAINS EXEMPTION WITHIN 2 YEARS

Client Sold house on 30/09/2021 and purchased the new property on 10/11/2021 and claimed Exemption u/s 54

now he is selling the same property which he purchased on 10/11/2021  and buying another property.

IS HE ELIGIBLE TO CLAIM exemption U/S 54 again?
 

Replies (4)
Quick Summary
This discussion explores whether a client can claim Capital Gains Exemption under Section 54 for a second time. The client sold a property, reinvested the proceeds into a new one (claiming exemption), and is now selling that second property to buy a third. While reinvesting can allow for a Section 54 claim, selling the newly purchased property within three years of acquisition typically makes the original exemption fully taxable.

The eligibility for claiming exemption under Section 54 of the Income Tax Act depends on specific conditions outlined in the section. Under Section 54, an individual can claim exemption on the capital gains arising from the sale of a residential property if the proceeds are reinvested in another residential property.

If the client is selling the property acquired on 10/11/2021 and intends to reinvest the proceeds in another residential property, they may be eligible to claim exemption under Section 54 again, provided all conditions are met.

https://bit.ly/3uEewFC

If the house property is sold within 5 years from the date of purchase then the exemption claimed is again taxable.

 If we sold property within 3 years from the date of purchase then then it's fully taxable ( no indexation benefit ) ,in your case you if you sold property within 3 years from 10/11/2021 . then it's fully taxable .

Take more Opinion in this case .

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