I purched house in 2001 and sold on 15 may 2010, The capital gain was 8.5 lacks.If i purchase house within 2-3 month is it my capital gain get adjusted for ready house not in construction.What is the proper rule for LTCG.
CA. Arpita Singhal (Partner) 27 April 2011
as per Section 54 an exemption can be claimed of the LTCG arriving on sale of a residential house property.
to claim the exemption a house property shall be purchased one yr before or within 2 yrs after the transfer of original HP. Amt of exemption will be:
i)if LTCG is less then or equal to the Cost of new HP-Entire LTCG will be exempt
ii)if LTCG is higher than cost of new HP-difference between LTCG & cost of new house will be chargeable to tax as LTCG
NEw hp should not be transferred within a period of 3yrs frm the date of purchase.