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Ltcg

ramesh agrawal (business) (179 Points)

05 October 2016

I am selling a major part of my property which includes a residential house, other commercial and residential property which is given on rent and some vacant land. The remaining property is only some vacant land.

1. Can I purchase two residential houses(including land cost on which house is situated) to save LTCG or am I eligible to buy only one residential house to save LTCG?

2. Is it true that the deducted LTCG becomes taxable if I purchase a third house within 2 years (or construct third house within 3 years) of sale of original property?

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7 Replies

CA Saba Naaz (Chartered Accountant) (8487 Points)
Replied 05 October 2016

Under both the sections,i.e., 54 & 54F.. the condition is to purchase one residential house property. Cost of the land is integral part of cost of residential house.

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CA Saba Naaz (Chartered Accountant) (8487 Points)
Replied 05 October 2016

And deducted LTCG becomes taxable in case of purchase of another residential house within 2 years or construction of another residential house within 3 years u/s 54F.

2 Like

CA Saba Naaz (Chartered Accountant) (8487 Points)
Replied 05 October 2016

For exemption u/s 54F, after purchase or construction of one house before the due date of return, the assessee can still deposit the amount under capital gain scheme.. which can be for additional made to that house only.

1 Like

ramesh agrawal (business) (179 Points)
Replied 06 October 2016

Is the purchase of one residential property clause for LTCG exemption apart from one existing residential house OR we need to have only one residential house in total whether old or new.

CA Saba Naaz (Chartered Accountant) (8487 Points)
Replied 07 October 2016

Sec.54F exemption is available only when assessee does not own more than one residential house on the date of transfer of original asset, exclusive of one purchased for claiming exemption under this section.

1 Like