Hi, I am selling my flat and purchasing new flat in MHADA owned building. In this case do I need to pay LTCG tax
Hi,
No, you do not need to pay LTCG tax provided you will be investing entire capital gain amount in new property.
So, you can take the benefit of capital gain tax exemption under section 54.
In case entire capital gains are not invested – the amount not invested is charged to tax as long-term capital gains.
If you are investing entire sale amount then there wont be any requirement to pay capital gain tax. However if you planning to save some money and not invest entire amount then i need to calculate your capital gain amount as in your case you can save entire capital gain tax by just investing capital gain amount u/s 54.
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Thank you.
It depends on the capital gain and cost of the new flat.
Thanks for reply. But my CA is saying as the property I am buying is owned by MHADA, I cannot claim the this benefit.
Hello Sir,
If you are investing entire capital gain amount in new property, then you don,t need to pay any LTCG tax.
No, he is not correct.
You can claim it.
I know that but important thing to note is that it is MHADA property who has ownership of that flat which I want to purchase
From various reading and articles i came to know that MHADA issues house on hire purchase basis and therefore you are not the real owner till you purchase the flat and therefore your CA might be telling that you cant claim such benefit.
Is your house also under such scheme of hire purchase?
Even if it is under such scheme then also there are various case laws in your support and i would suggest you can claim such deduction.
You can call me if you need further clarification or guidance.
Thank you
Hi
If the entire amount of capital gains is invested in new house property, complete exemption shall be available and there shall be no capital gain tax liability. You need to report the same in ITR.
Investing in a MHADA flat is not a clear route as it could be litigative. However, there are many case rulings in favor.
In my opinion, you should claim the exemption.
Hi,
This one is a debatable issue. There are many case laws in favour of and against the MAHDA property.
It is advisable that you should claim the exemption.
Not aware of it.