Help all,
I am in the process of selling my home and purchase of a new home. So that I can save LTCG tax.
I have an important question . Is it mandatory that my date of purchase should be later than the date of sale of my original home? One of my friends has indicated that I must purchase only after the sale. Otherwise exemption from LTCG as well as source of fund for my purchase would be in trouble.
Please clarify on the matter.
Regards
Harsha
You will get deduction u/s 54 of Income tax act. You can Buy one new house even 1 year prior to sale.
Your friend is not correct about it. You will eligible to get exemption of Capital Gain even Date of purchase is earlier than the date of sale. But maximum you can go back only for 1 year.
Extract of the section has been attached for your ready reference.
Thank you very much for your quick clarification. It would simplify my process
CAclubindia
