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Query on capital gains

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sowmiya.v

ca student

65 Points Posted on 19 December 2012

AY :2013-14

Assesse has sold a residential house property in oct 2012 on which capital gains is Rs 3 crores. he has got a property in august 2012 through family, in that property there were some people already staying for around 20 years. In order to get the property cleared from them Rs 3 crores is to be paid, can the assesse claim this amount against that capital gains U/s 54 ?

Replies (1)

Sonali

Partner

24 Points Posted on 21 December 2012

The amount of Rs 3 crore paid to tenants can be claimed as Cost of improvement u/s 55. It cannot be claimed u/s 54 .

As per sec 54 any long term capital gain , arising to an individual or huf , from the sale of a residential property shall be exempt to the extent such capital gain invested in the

a) purchase of another property within 1 year before or 2 year after the due date of transfer of the property sold and /or,

b) Construction of residential property purchased or constructed is not transferred within a period of 3 years from the date of acquisition

If the new residential house property purchased or constructed is not transferred with in a period of 3 years from the date of acquisition.