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Capital gains query

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Roshni

Student CA Final

66 Points Posted on 10 March 2020

For claiming exemption under section 54 Residential Property has to be purchased within 1 year or 2 years after the due date of transfer.

So Cost of new Asset or Capital gain whichever is lower

If Assessee has Purchased Residential property within 1 year and cost of acquisition Rs.67 Lakhs and stamp duty and Registeration charges paid Rs.4 lakhs so the total cost becomes Rs.71 Lakhs

so whether this Rs.71 Lakhs will be cost of new residential house eligible for exemption under section 54??

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Quick Summary

This discussion clarifies the rules for claiming exemption under Section 54 for capital gains tax on residential property. It explores the timing of property purchase (within 1 or 2 years of the transfer date) and how the cost of the new asset is calculated. Specifically, it questions whether stamp duty and registration charges should be included in the acquisition cost and how this impacts the eligible exemption amount, which is capped by the capital gain itself.