Deductions u/s 54 available on ltcg of commercial property

Exemption u/s 54 is meant for residential house property only.

Under Section 54 � Any Long Term Capital Gain, arising to an Individual or HUF, from the Sale of a Residential Property (whether Self-Occupied or on Rent) shall be exempt to the extent such capital gains is invested in the Purchase of another Residential Property within 1 year before or 2 years after the due date of transfer of the Property sold and/or Construction of Residential house Property within a period of 3 years from the date of acquisition

Under Section 54 � Any Long Term Capital Gain, arising to an Individual or HUF, from the Sale of a Residential Property (whether Self-Occupied or on Rent) shall be exempt to the extent such capital gains is invested in the Purchase of another Residential Property within 1 year before or 2 years after the due date of transfer of the Property sold and/or Construction of Residential house Property within a period of 3 years from the date of acquisition

Under Section 54 � Any Long Term Capital Gain, arising to an Individual or HUF, from the Sale of a Residential Property (whether Self-Occupied or on Rent) shall be exempt to the extent such capital gains is invested in the Purchase of another Residential Property within 1 year before or 2 years after the due date of transfer of the Property sold and/or Construction of Residential house Property within a period of 3 years from the date of acquisition

Unfortunately no benefit of Section 54 will be available for purchase of a commercial property after transfer of a comercial property. Benefit of Section 54 is restricted to purchase of ONE residential house in India. The capital ssset transferred should be a residential house.

 

Hi Tony,

Is any other benefit or deduction available to an Individual Assessee, for such a transaction?

 

Thanks

Yes such an individual can claim the benefit of Section 54EC if he invests the sale proceeds in bonds of National Highway Authority of India or Rural Electrification Corporation.

Section 54EC stipulates that any long term capital asset could be transferred by any person ( need not necessarily be an individual), who should invest in the above specified bonds within 6 months from the date of transfer of the long term capital asset. Also the investment made by an assessee in the bonds, from capital gains arising from transfer of original assets, during the financial year in which the original asset is transferred and in the subsequent financial year should not exceed 50 lakhs.

The bonds should not be transferred/mortgaged within 3 years of their acquisition failing which, the exemption given earlier would be revoked.