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Exemption under section 54

(Guest)

Dear Folks

My client has sold his house property few days back for a particular sale consideration and the TDS has been deducted by the buyer @ 1% under 194-IA. He has already finalised a piece of land for a sale consideration in excess of the sale consideration received from the buyer of the house property. Now he is going to put the additional funds required for the registration of land and complete the process in 1-2 months time. Thereafter he is going to start the construction of a house in 6 months to 1 year time. However he is definitely sure of completing the construction before the 3 years period stipulated u/s 54. The query is

a) When we submit his tax return for the previous year 2014-2015, by end July 2015, can we claim the deduction u/s 54 for the entire sale consideration?

b) If so, can we claim the refund of the 1% TDS deducted?

Thanks

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2 Replies

Mihir (Wealth Manager) (5293 Points)
Replied 28 June 2014

If the investment in property is more than the long term capital gain, then nil tax payable. You may file ITR and claim refund of TDS provided there is no other tax liability.

Tribhuvan Aditya Singh (Student as well as Self-employed) (3710 Points)
Replied 29 June 2014

a) you can claim exemption under sec 54 for the whole of capital gain invested. b) yes, you can claim refund of tds since tax payable will be nil on sich transaction.