Hi,
What will be considered is the year in which you received the allotment letter from the builder.
Regards,
Keerthiga Padmanabhan
M.Com., CA, LL.B
Offset Capital gains on sale of site via buying an apartment
I sold a site recently and the indexed appreciation is liable for Capital Gains as far as I understand. However, i also bought an apartment, that i booked about 4 years ago, and registered it this year. My question is whether i can claim exemption on paying of Capital gains, considering I bought an apartment this year too. The question i have is, what constitutes buying an apartment - is it the year of registration or the year of booking. In my case, i booked the apartment in FY 2012-13, and took possession in FY 2017-18. During the years between booking and registration, i have paid installments (under a loan) to the builder.
Asked 6 years ago in Capital Gains Tax
Hi
Date of allotment constitutes the date of acquisition of property. Please check as to when you have received the letter of allotment from the builder.
I got the allotment letter sometime in 2012. Now, here is my question: Section 54F says that "any gain arising from sale of a long term asset is exempt from Capital Gains IF the entire sale consideration is invested in a residential house within 1 year before the sale OR 2 years after the sale". I did buy an apartment which has been registered in my name in the same year as the sale of the site (from which i got the capital gains). However, the same apartment was allotted to me in 2012 and I have been paying installments from 2012 to 2015, which I finally got possession in 2017 and then registered it on my name. So, is it possible to offset the capital gains that I got from the sale of the site, with the apartment that i purchased? If not, it is possible to atleast offset a portion of the capital gains, equal to what I paid out as installments towards the apartment in the year 2017?
Asked 6 years ago
No exemptions in respect of this flat which was alloted in 2012 shall be available. This shall not be considered as reinvestment of capital gains as per section 54 F.
Hi,
Sorry, unfortunately you cannot claim that for the purpose of exemption. Neither can you claim proportionate exemption of capital gains.
Regards,
Keerthiga Padmanabhan
M.Com., CA, LL.B
Hello,
Since your allotment letter is dated 2012 according to the department the house property is purchased in 2012 and not in the year of registration.
Under such circumstances you cannot claim the amount paid in any of the years for that house property as a deduction against your LTCG.
You may invest the capital gains in bonds or may be another house property unless you have more than 1 house property.
Trust this clarifies your query.
Feel free to call / get back in case of further clarifications.
Thanking You.
Regards,
Rohit R Sharma
BCOM, FCA, LLB, CERT. FAFP
No, you can't offset the capital gains because the date of allotment letter is considered as a date of purchase.
Hence, your date of purchase will be in 2012.
Please feel free to call/ revert in case you need more clarity.
Thanks and regards
Abhishek Dugar
CA CS B.Com
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