Long term capital gain

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Vinay Katiyar

68 Points Posted on 04 July 2016

Hello,

I would like to know if am allowed to claim the exemption on the following transaction :-

1. I Bought a Flat on Oct 2014. It was under contruction and will get completed by June 2017. I am paying money in Installement and i have booking letter and Sale and construction Agreeemnts

2. I sold a flat in June 2015. I made capital gain on 15 Lacs Rs.

Can show the this gain as reinvestment done under residential property for paying next installment as it is bought withing one year before the sale of the flat ? I am asking this because this still under construction and i hope i am allowed to claim exemption in such cases.

Please help.

Regards,

Replies (2)

CA MANISH BINDAL

CHARTERED ACCOUNTANT

353 Points Posted on 04 July 2016

Yes, you can claim benefit of Exemption u/s 54.

If, Assessee sold his residential property and invested the capital gain within the stipulated time in New house. The construction of the new house may start before the date of transfer, but it should be completed within 3 years from the date of transfer of the original house.

Hence construction of flat which will be completed up to june 2017 is within the period of 3 Years from the date of selling the flat i.e june 2015. Hence you are eligible to claim exemption.