Capital gains
JAGANNATH RAO PARINAM
(Querist) 20 July 2013
This query is : Resolved
Dear Sir,
I had sold one plot of land on 5/07/2012 and sold one house in may 2013. I am thinking to invest the sale proceeds from land in Capital gain a/c before 31/07/13.My queries are as under:
1. Can I buy a single residential house against both the capital gains as mentioned above.
2. or I have to invest separately in two different residential houses to claim the capital gains .
3. Can I purchase two or more residetial houses against sale of one property. i.e against one capital gain .
4.If yes, Can I purchase two houses in two different cities
I had ealier sent mail for this query but no reply from your experts
Thanks and regards,
PJRAO
Dr. Jyothi Vishwanath
(Expert) 21 July 2013
Experts did not reply since you can afford the services of a tax consultant.
Rajendra K Goyal
(Expert) 21 July 2013
You can purchase residential property to save LTCG.
To save long term capital gain the seller has to buy a house property within two years of sale of capital asset or construct a house within three years. If seller is not able to identify a property he/she can open a capital gain accounting scheme’s special account and park the money until he finds the property (with limit of 3 years).
Hyderabad Tax Tribunal reference taken from news paper Business Standard dated 11.05.2013,:
The Tribunal observed that the only reason for the tax officer and the first appellate authority to reject the taxpayer's exemption claim was that he cannot claim exemption under both the sections towards investment in a single house. The Tribunal did not concur with this interpretation and observed that the same is totally misconceived and misplaced. The restriction imposed under section 54F does not allow exemption if the taxpayer purchases or constructs more than one residential house. In view of the above, the Honourable Tribunal held favourably that the taxpayer is entitled to claim exemption for the amount invested in the new residential house under section 54 as well as section 54F. It also held that there is no specific bar under either of the sections or any other provision of the Act prohibiting allowance of exemption under both the sections in case the conditions of the provisions are fulfilled.
