Get 3 Yrs of CCI Pro Membership at Greater Value. Subscribe Now!

Long term Capital gain Tax Query on sale residential property

600 views

Save Share

Anupam Bhandari

24 Points Posted on 07 August 2024

Sale of Property dated: 06-29-2024
Purchase of Under Construction Property dated: 03-28-2024 (price 1.7 cr)
Long-term capital gain- 37 lacs
Written date of Possession on the agreement for the new property: 12-31-2027

Capital gains condition says need to hold for at least 3 years else tax benefit will be reversed.
Another condition says possession needs to be within 3 years from the purchase date.

My question:
1. Will I get a tax benefit if possession is after 3 years from the purchase date?
2. I satisfy the condition of holding the property for 3 years from the purchase date on 3-29-2027, can I sell after this date and still claim tax benefit?

Replies (1)

Chandrashekar M

38 Points Posted on 11 August 2024

Based on the information provided, here are the answers to your questions:

1. _Possession after 3 years from purchase date_: You may not get the tax benefit if possession is after 3 years from the purchase date (March 28, 2027). The condition specifies possession within 3 years, so possession on December 31, 2027, might not qualify.

2. _Holding property for 3 years and selling after_: Yes, you can sell after March 29, 2027, and still claim the tax benefit. You've satisfied the 3-year holding period condition.

However, please note:

- The tax benefit is subject to your meeting all conditions under Section 54 of the Income-tax Act, 1961.
- The property purchased should be a "residential house" to qualify for the tax benefit.
- You should not sell the new property within 3 years from the date of possession to avoid reversal of the tax benefit.