Deduction under section 54

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anand dilip bagade

PROPRIETOR

97 Points Joined October 2010

Assesse purchase under construction flat in June 2017 for 48 lakhs. He sells another property in Sep 2018 for 30 lakhs, Capital gains arising from this property is 12 lakhs. Under construction Flat which was purchased in June 2017 is still under construction and assessee is paying the builder as per agreement terms and possession of flat is not received yet. During FY 2018-19 assessee pays Rs.7 lakhs and bank disburses loan of 10 lakhs against flat purchase.

Whether this payment of 7 lakhs by assessee and 10 lakhs by bank will qualify for deduction under section 54.

Kindly Advise.

Replies (2)

sanjith kotni

Articled assistant

663 Points Joined November 2015

yes as per sec 54 the assessee is required to invest capital gains in the other residential house property.Property can be purchased one year before or within 3 years it can be constructed or purchased .In your case you invested as per provisons of sec 54 in under construction property.so primarily you invested one year before only .You can claim exemption under 54 for full 12 lakhs

anand dilip bagade

PROPRIETOR

97 Points Joined October 2010

New asset was purchase in June 2017 and another property was sold in Sep 2018, so there is sale was made after one year from purchase of property, then how deduction under section 54 can be taken.