Hi There
I purchased a flat in Feb 2003 for total value of Rs. 4 lacs. Then I gifted it to my wife on 4th Dec 2014. She has sold the flat in Sept 2015 for Rs. 30 lacs. I understand this qualifies for LTCG under section 54 even though it's gifted property. The LTCG comes around Rs. 20 lacs. Question 1 - Does the LTCG fall under my wife's name or my name?
Now we have already booked a NEW flat in joint name in April 2014 i.e. 1 year prior to selling old flat but the 'agreement for sale' was done on 16 Dec 2014. The NEW flat is under construction and estimated to be done by June 2017.
The section 54 says: Within a period of one year before or two years after the date of transfer of old house, the taxpayer should acquire another residential house or should construct a residential house within a period of three years from the date of transfer of the old house. In case of compulsory acquisition the period of acquisition or construction will be determined from the date of receipt of compensation (whether original or additional).
Question 2 is does this one year period starts from date of booking NEW flat or from agreement of sale? If it's from booking date then i believe i have to find another flat or purchase capital gain REC bonds.
kindly advise.
CAclubindia
