Hi Sandeep
Yes, this is possible.
You can claim exemption under section 54 if the old property is sold within 1 year of purchasing the new property.
However, if it is not sold within 1 years, exemption shall not be available.
I want to sell my 2BHK flat and want to buy 3BHK flat
Dear Sir/Madam, I stay in 2BHK flat (which is owned by me) with my family. I want to buy 3BHK flat now and I want to sell this 2BHK flat. I purchased this flat in 2010 and the possession of which I got in 2016, so I want to save long term capital gain on my existing property by selling exiting flat and buying new one. But here is one problem, I am getting 3BHk flat in good rate at good location as per our requirement but I am not getting buyer for my flat yet. Is there any possibility by anyway, where I can buy new flat on home loan first, then whenever my existing flat sell in future in 6-10 months, I will make prepayment of my home loan with the amount I will receive after selling exiting flat. Can I adjust my long term capital gain this way? Otherwise kindly suggest me what to do in this situation when I want to buy flat now as I am getting good deal at good location but not getting buyer for my existing flat. Kindly advice. Thanks in advance, Regards Sandeep Rawat
Asked 3 years ago in Capital Gains Tax
YES, YOU CAN GO FOR THE PURCHASE OF NEW FLAT AND ALSO SAVE THE CAPITAL GAIN TAX ON THE SALE OF THE OLD FLAT.
As per the IT Act, if New residential property is purchased either 1 year before the sale or 2 years after the sale of the property by an individual or HUF, the capital gains earned on the sale of a residential house, the capital gain will be exempt from tax.
New House can be bought upto one year before selling the old house. So within 1 year old house should be sold. In that case capital gain can be adjusted.
Dear Sir,
Yes, it is possible to do so but the property must be sold within 1 Year otherwise the entire amount will become taxable.
Thanks and Regards
Shiv Kumar Agarwal
Hello,
For exemption of capital gain u/s. 54, you will have to sell the old flat within one year from the date of purchase of the new flat.
I hope this answer satisfies your requirements.
Regards,
CA Hunny Badlani
Hi
Yes you can do so but you need to sell the sell with in 1 year from date of purchase. As per section 54 The seller should purchase a residential house either 1 year before the date of sale/transfer or 2 years after the date of sale/transfer. In case the seller is constructing a house, the seller has an extended time, ie. the seller will have to construct the residential house within 3 years from the date of sale/transfer.
Dear Sandeep,
Hope you are doing well !!
Yes, you can do that.
The purchase of new house has to be done one year before the sale of the old house.
- You can purchase 3BHK flat now but sell the 2BHK within 1 year from the date of purchase of 3BHK.
Yes you will have a window of one year from the purchase of new flat to sale this flat and claim exemption on that capital gain by paying off loan of this loan.
Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.
Thank you.
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