House property

To become long term capital asset, assesee should hold HP for more than 2 year. If holding period is less than 2, it is short term.

Now Let's see first about the purchase of new residential house on 01.01.2019 for 2 lacs and sold the same on 01.01.2020 for 4 lacs. Since Holding period is less than 2 years, it is short term and u need to pay tax on 2 lacs gain (4-2) as per ur applicable income tax slab rate.

Regarding compulsory acquisition, as per sec 45(5), capital gain will only be taxed in the year of receipt of compensation. So, calculate LTCG and tax it in FY 18-19 or AY 19-20 because u received it in March 2019. Ur capital gain only arise in AY 19-20. U need not worry about CG of previous years.. And as per sec 54H, it is enough if u buy property within 2 years from date of receipt of compensation i.e on or before 01.03.2021.

Can he purchase asset before 1 year from the date of compensation received as like sec 54?

To get exemption from taxability of Capital gains under sec 54, either purchase should be within 1 year before or 2 years after the date of transfer.

But rule of CG is that taxability should happen in the year of receipt itself. So If u fail to buy the HP during the year of receipt, u can deposit the Capital gain amount in deposit scheme specified by CG and claim the exemption.

Exemption amount will be lower of Capital gain and (Cost of new house or amount deposited in CG scheme).

And whenever u find suitable house for you (subject to time period specified above), u can withdraw funds from CG deposit scheme and buy a house. But such house should not be transferred within 3 yrs from the date of purchase.

Now in ur case, u bought HP on 01.01.2019 and it was sold on 01.01.2020 i.e sold before completion of 3 yrs condition and it is not eligible for CG exemption

Here why "before 1 year condition" is not applicable?

Applicable but property was sold before 3 yrs right.. Purchase along with holding of 3 yrs is condition

Yeah but we can purchase one year before from date of consideration right ?

Yes u can. But remember, u will get the exemption to the extent of purchase value or capital gain whichever is lower

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