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Sell Real Estate & Buy New from other source and still gain tax exemption

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Leo Samson

Self

47 Points Posted on 15 March 2023

I want to sell a property A and buy another property B. Let us say I sell property A to get X lakhs, but during this selling period I already paid advance Y lakhs to buy another property B from my other savings. Later on I paid the remaining amount for B from the X lakhs I got from the property A.

Can I still claim the capital gain exemption for reinvesting in a new real estate though I paid partial amount from my other sources or I need to show to IT that full amount was paid from the X lakhs that I got from property A.

Replies (3)

Quick Summary

This discussion explores whether you can still claim capital gains tax exemption under Section 54 of the IT Act when selling one property and buying another, even if part of the purchase price for the new property was paid from separate savings. The advice given is that you can still qualify for the exemption, provided the new property was purchased within 12 months before selling the old one, regardless of the source of funds for the purchase.

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

212419 Points Posted on 15 March 2023

You can get full capital gain exemption u/s. 54 of IT act, provided your purchase of second property B was not more than 12 months before sell of first property A; even if source of funds in purchse were not connected to the sell transaction.