Very short question.
Saving of Capital Gain as of my case below:- Sub:- Guidance For Saving of Long Term Capital Gain Tax Sl No Property Purchase Value Purchase Date Sale Value Sale Date Remarks 1 Land 700000 ( 7Lakh ) 21-07-2009 2200000 21-09-2017 Capital Gain amount around 9 lakh 2 Flat 17 Lakh 10-07-2010 - - Outstanding Loan 2.5 Lakh paid from sale proceed from above 3 Flat 38 Lakh 17-02-2017 - - Loan from LICHFL 28 Lakh and Personal Finance Rs 10 Lakh Issue : Saving of Long Term Capital Gains of Propery sold at Sl No 1 ( Around 9 Lakh on 21-09-2017) As per section 54 Within a period of one year before or two years after the date of transfer of old house, the taxpayer should acquire another residential house or should construct a residential house within a period of three years from the date of transfer of the old house. In case of compulsory acquisition the period of acquisition or construction will be determined from the date of receipt of compensation (whether original or additional). Question :- i) Can I claim Long Term Capital Gain Tax rebate on property purchased on 17th Feb 2017 as per Section 54 i.e getting new property before selling of old property ii) Purchased Property is Rs 38 Lakhs ( More Than sold property 22 lakh of plot) but Rs 28 Lakhs is loan from bank. Will it not be issue that purchased property minus loan amound is Rs 10 Lakh wherein Sold Value of Plot is 22 Lakh. Will i get complete rebate being purchased property more than sold property or only 10/22 ( Being Rs 10 Lakh Per finance and 22 Lakh Sold Property). iii) On the day of Purchase flat on 17-02-2017, I was holding one flat , one plot in addition to new flat purchased , will plot not be counted as residential property on 17-02-2017 . Means I was holding two residential house on date of purchase of new house. Is Residential plot treated as residential house. iii) will I get complete tax benefit in the above case even purchased for flat is with help of loan i.e 28 lakh loan plus 10 lakh from personal finance. Personal Finance is less than sold value of plot ( RS 10 LAKH LESS THAN RS 22 lakhs sold value of plot)
Hi
This sounds a little complicated. Please read the following carefully..
Since you have sold a land, section 54F comes into play for exemption for reinvestment. According to this section, you should not hold more than one residential house property at THE TIME OF TRANSFER. By transfer, it means sale of the land.
Where as, at the time of sale, you were already the owner of 2 flats. Hence, you cannot take benefit of this capital gain exemption and taxes will have to be paid.
All the other questions become immaterial after the above explanation.
Since you have sold a land and not a flat, section 54 will no be applicable to you. Applicable section will be 54F but since you own two flats already, you can't get benefit of this section.
Hi,
Since you are already holding more than 1 residential property at the time of transfer, you will not be eligible for tax exemptions.
You will need to pay taxes.
Regards,
Nikhil
Hi,
Your answers as below:
i) Yes. Benefit of acquisition of property at Sl. No. 3 shall be available to you.
ii) Only cost of acquisition (irrespective of loan amount) is considered.
iii) Since you sold Land (which is not residential property) benefit u/s 54 shall not applicable but only u/s 54F. Such benefit u/s 54F is available only when you are not holding more than 1 residential property on the date of transfer of the property. (This is other than the property actually acquired)
iv) Yes, benefit shall be available in case of purchase from loan amount also.
Regards,