Sale proceeds from sale of plot of land meant for residence
T.N.REDDY
(Querist) 25 December 2017
This query is : Resolved
i have sold my plot of land which is meant of residential, and sale proceeds of such sale was invested in another residential house property ( this is my third residential house property) within a period of one year. so, can i be qualified for exemption from capital gain tax. If, so, under what section, kindly advice.
B.Chakrapani Warrier
(Expert) 26 December 2017
Not qualified for capital gains exemption. Inference - section 54F(1) proviso (a)(i).
Kumar Doab
(Expert) 26 December 2017
You can benefit from the post of Mr. B.Chakrapani Warrier
Sankaranarayanan
(Expert) 26 December 2017
If you are using your entire sale proceeds to buy a house property you may end up paying no tax on your gains when – You satisfy all these conditions
(a) You purchase ONE house within 1 yr before the date of transfer or 2 yrs after or construct ONE house within 3 yrs after the date of transfer.
(b) You do not sell this house within 3 yrs of purchase or construction
(c) This new house purchased or constructed must be situated in India
(d) You should not own more than 1 residential house (other than the new one) on the date of transfer
(e) You do not purchase within a period of 2 yrs after such date or construct within a period of 3 years after such date any residential house (other than the new one).
When you satisfy these conditions and invest entire sale proceeds towards the new house – you won’t pay any tax on your gains. However, if you invest a portion of the sale proceeds, the exemption will be the proportion of the invested amount to the sale price or exemption = cost of new house x capital gains/net consideration.
Kumar Doab
(Expert) 26 December 2017
Subsequent to descriptions by posts of Mr. B.Chakrapani Warrier, Mr. sankar narayanan, for self reading and to pick up details you may go thru:
http://www.incometaxindia.gov.in/pages/acts/income-tax-act.aspx
http://www.incometaxindia.gov.in/tutorials/16.%20exemption%20under%2054.pdf
http://www.charteredclub.com/section-54/
T.N.REDDY
(Querist) 26 December 2017
sir, with reference to your point no (d), i have four residential houses, out of which three are given on rent, and one i am staying. therefore, by not satisfying this condition, am i not eligible for exemption u/s 54F. kindly enlighten me further ..
T.N.REDDY
(Querist) 26 December 2017
sir, with reference to your point no (d), i have four residential houses, out of which three are given on rent, and one i am staying. therefore, by not satisfying this condition, am i not eligible for exemption u/s 54F. kindly enlighten me further ..
Dr J C Vashista
(Expert) 27 December 2017
You have chosen wrong club, post this query in CA Club.
