• Capital gain account money utilization

Under section 54 we get 2 years for buying residential house and 3 years for construction. My question is can we buy plot after two years and construct house before 3 years ? Please answer carefully as I posted my questions previously but the answers not correct
Asked 2 months ago in Capital Gains Tax from Delhi, Delhi
Hi,

- Yes you can buy the plot after two years subject to completion of construction should be completed before 3 years from the date of transfer. There were cases already decided in favour where the assessee purchased plot before the date of transfer and completed construction within 3 years from the date of transfer.

- In case of construction it is 3 years and it is no where mentioned in the section that plot for construction should be purchased within 2 years which is a condition for ready to move in flats/apartments.

Thanks
Vivek Kumar Arora
CA, Delhi
1637 Answers
48 Consultations

5.0 on 5.0

Hi 

My apologies for your past experience.

Yes, you can buy plot after two years but you have to make sure that construction gets completed before 3 years.
Abhishek Dugar
CA, Mumbai
3578 Answers
161 Consultations

5.0 on 5.0

Hi,

Yes, you can do that but ensure that the construction is completed before 3 years.

Regards,
Nikhil
Nikhil Khanna
CA, Mumbai
1377 Answers
17 Consultations

5.0 on 5.0

Sir section 54 says that you have to construct your house before completion of 3 years it doesn't matter if you build it in 1st year or build it in last 6 months you just should own a constructed property if you are taking more time than 2 years.
So as per your query you can purchase the property and construct it in 3rd year but in that case you need to keep your money in the account which is for construction of property and not purchase and also if you don't get it constructed within 3 years from the date of transfer then you need to pay tax on capital gain exempted at that time.

Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.
Thank you
Naman Maloo
CA, Jaipur
497 Answers
4 Consultations

5.0 on 5.0

Dear Sir,

Hope you are doing well !

Apologies for your past experience.

Yes, you can buy plot after two years but make sure that the construction is completed within a period of three years.

Thanks & Regards,
Payal Chhajed
Payal Chhajed
CA, Mumbai
1002 Answers
8 Consultations

4.8 on 5.0

Hi,

Yes, you can do the same .
Karishma Chhajer
CA, Jodhpur
543 Answers
3 Consultations

5.0 on 5.0

Hi,

Yes, you can buy plot after two year and construct house before three years from the date of sale of old house.
Lakshita Bhandari
CA, Mumbai
2177 Answers
71 Consultations

5.0 on 5.0

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