Capital gains
JAGANNATH RAO PARINAM
(Querist) 17 July 2013
This query is : Resolved
Dear Sir
I have sold one plot of land in July 2012 and sold another house in 2013,My query is as under:
1.Can I deposit the sale proceeds from plot in Capital gains a/c before 31/07/13 and then utilise the sale proceeds from sale of plot and capital gain from house sale for purchase of only one residential house within the prescribed period under section 54 and 54 F .
2.or I have to buy two separate residential houses against each capital gain claim.
3. Can I claim exemption for two residential houses purchased against the capital gains from sale of only one house.
3. If ,yes then two new houses purchased should be in the same location or different locations in the same City.
3. or can the houses be purchased in different Cities.
Appreciate your pointwise clarifiction
PJRAO
Vineet
(Expert) 10 December 2013
Many hypothetical situations Mr Rao
1. Yes, you can claim exemption simultaneously u/s 54 and 54F in respect of sale of residential house and plot in respect of purchase of one house subject to fulfillment of other conditions. However, total exemption shall be limited to investment in new property and not independant claims.
2. buying two houses will be much safer. But please ensure that you you first buy new house in respect on claim u/s 54 and then other house for claim u/s 54F and not vice versa.
3 and 4. opinion is divided. If both house are functionally connected, there are treated as single unit. houses at different locations are normally not accepted by assessing authorities. Though there is one decision where alluding to general clauses act, it has been noted that "a" in section 54 includes many and hence there is no restriction on number of houses bought to claim exeemtion u/s 54.
JAGANNATH RAO PARINAM
(Querist) 11 December 2013
Dear Mr. Vineet
Thanks indeed for making the doubts clear.Actually in books we don't get these type of problems and answers.That is why I have to take your expert opinion.
Thanks and regards,
p.j.rao
