Long term capital gain on sale of property

Tax planning 926 views 5 replies

Dinesh KUmar

acd

34 Points Joined June 2009

Dear Sir,

I have sold a flat as long term asset and have capital gain of around 18L.(after indexation) I have booked another flat with builder and paying money as per construction. As per payment schedule I will be paid him more than Rs 18L before I file income tax return for this year and hence I do not need to open capital gain account with bank.

My question is as per builder the flat will be ready in 4 years and hence registration will happen in four years. So am I eligible for long term gain adjustment aginst this property (as registry will happen after 4 years) or I have to pay tax.

Regard

Dinesh

Replies (5)

CA Vinay parmar

Chartered Accountant

1318 Points Joined January 2012

No, as per income tax law the new flat should get constructed within three years.

You will not get the benefit

Z

Tax Consultation (US and India)

2970 Points Joined September 2011

For the purpose of sec 54 and 54F

INVESTMENT is to be made within specified time limit and COMPLETION of construction does not matter. For this following case laws may be reffered

B.B. Sarkar v. CIT [1981] 132 ITR 150 (Cal.)

Satish Chandra Gupta v. Assessing Officer [1995] 54 ITD 508

Commissioner of Income-tax v. R.L. Sood

details in this post

/forum/details.asp?mod_id=177158&offset=1

You are eligible for deduction

rahul chaurasia

Dy. Manager

25 Points Joined April 2014

Please help me..

Apr 2014 : Sold My home in 27 Lacs. (Preclosure of previous loan 6 Lacs paid to LIC HOusing) Long term capital Gain Calculated 12 Lacs.

June 2014 : To save LTCG, I purchased and house for Rs. 19 Lacs +Registration amount (Loan 8.5 lacs from HDFC)

But now i feel that this new property is not good as i dont like the location and want to sell in same of less price. What is further options for me to save My LTCG?? do i still have time and chance to save LTCG and how? Please tell the time limit also. can i purchase a new property or tax saving bonds now?

MASTER MIND

CA on Duty

104 Points Joined April 2015

Dinesh i m agree with Z.

COMPLETION of construction does not matter.

U r giving amount to builders to construct a flat.

Completion of constuction matter when you construct a single house for you.

MASTER MIND

CA on Duty

104 Points Joined April 2015

Rahul,

As per my opinion now there is no option for you right now. As the time limit is over for you.

Read this for tax saving bonds-

"The investment has to be made within six months from the date of the transfer in order to be eligible for claiming the benefit of deduction under section 54EC.

The maximum amount that a person can invest in these bonds (NHAI and REC combined) in any financial year is Rs 50 lakh. If a person has long-term capital gains which have accrued to him after 1 October of any year, and the amount of capital gains exceed Rs 50 lakh, he can split his investment by investing Rs 50 lakh up to 31 March of the following year and the balance on 1 April of that year. The balance amount in this case, however, should not exceed Rs 50 lakh. By doing this, he can have the benefit of investment of up to Rs 1 crore. Joint applications shall also be included for the purposes of this limit."

So now in your case if you sale new flat within 3 years then you have to pay LTCG on original asset and STCG on new asset.