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Exemption u/s 54 for Capital Gain

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Dhairya Dave

6 Points Posted on 23 June 2020

Hello,

If an assessee has invested the amount of sale of asset in Capital Gain Account Scheme and the period of 2 years is going to be ended let's say on 31/08/2020 so if before the due date he enters into sale agreement with someone for purchase of new property is he still able to claim the exemption by just entering into an agreement?

Also wanted to know that whether the last day would be 2 years from sale (i.e. 31/08/2020) or will it be end of FY i.e. 31/03/2020?

Replies (4)

Quick Summary

This discussion clarifies the rules for claiming exemption under Section 54 of the Income Tax Act for capital gains. It confirms that simply entering into a sale agreement for a new property is insufficient to claim exemption; actual payment must be made. The deadline for purchasing a new property is two years from the date of the original asset's sale, not the end of the financial year.

David

article Assistant

1644 Points Posted on 24 June 2020

Hlo, According to law, a residental house should be purchased within 2 year after the date of transfer otherwise balance amount in capital gain account will be taxable.
Last date calculated from the date of transfer. So here it will be 31/08/2020.
However due to this current Uncontrollable situation due to covid, we can expect relaxation from govt.