Mihir (Wealth Manager) (5293 Points)
18 December 2016A property was sold in the year July 2014, and reinvested in another property in August 2014. ITR has been filed claiming exemption u/s 54 and summary assessment u/s 143(1) received.
Now the new property is to be sold before August 2017.
How will he reverse the exemption claimed in the ITR and how can he pay the tax on LTCG on property sold on July 2014 ?
Thanks
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(160332 Points)
Replied 18 December 2016
The reversal will be whatever exemption you had claimed u/s. 54 in Ass Yr. 2015-16, would be added to your income in the year (when the property sold before 3 years)
Say, your capital gains exemption under section 54 was X Rs.
Now if the said property is sold in April 2017, (assuming before 3 years lock-in-period), the LT cap. Gain Tax liability will arise over the X amount in FY 2017-18. i.e 20% of X plus cess.
Mihir
(Wealth Manager)
(5293 Points)
Replied 18 December 2016
Do you think section 234 will apply while calculating tax liability for LTCG ?
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(160332 Points)
Replied 18 December 2016
Not from the first year of investment in house property, but from the date when its sold. (second property in which deduction was claimed)
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