Definition of purchase of house in Section 54F

Hi Vipul

                U can buy a new house in Noida. The Law say tat u should not hold more that one house when u sale that Property. As u r buying now after one year is not a problem. But u Should not sell this new house, which u bought from the sale consideration of sale of property for purchase of Noida house. If u sell the property now then exemption which u claimed will be taxable current Year.

Thanks I Hope this info helped u,

R Shriram.

Thanks a lot Shriram. I need few confirmations. Second provision says:

(ii) purchases any residential house, other than the new asset, within a period of two years after the date of transfer of the original asset;

In some places, I have seen it to be written as 1 year. I'm not sure which is correct, 1 year or 2 years.

Secondly, the provision (iii) in the section talks about 3 years waiting in case of construction. If I buy an under construction property from a builder, would it be purchase or construction? Would it matter if the house is delivered to me before three years from date of purchase of original house in 2010?

You can purchase a new residential house after Jan 2012 since 2 years from the date of transfer of original asset would have expired.

Otherwise you can start the construction of a new house but you have to see that it is not fully constructed within Jan 2013 to avoid withdrawal of exemption.