Capital Gains

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Hi Pankaj, i had booked (bought)a flat in noida in Sept 09. The total cost of the flat would be approx. 86L and it is booked under the construction linked plan. Till date i have paid 23.7L (7.5L paid on booking,7.5 paid in April '10, 8.7L paid in June '10). This flat is due for possesion in June,2013.

I have recently (Jan'11) sold my current residential flat for 67L (i had only 1 property)for and am incurring a capital gains of 28L.

2 questions :

a: though the new flat is a builder constructed flat ,hope i can take the 3 years of construction(post sale) clause to claim benefit of capital gains exsemption even though i had booked the same in '09? b: would the amount i have already paid ie: 23L be taken as part used for the purchase of the new flat? ie: i need to put in only 5L more in a capital gains account or would i have to put the entire capital gains 28L out of the sale proceeds ?

would be great if you could resolve my query.

thx in advance

Rm

section-54 capital-gains ltcg income-tax
1 Answers

1.Income tax act is not very clear on this, whether house not constructed by you will be considered for 3 years period or not.
But there have few court rulings which consider date of booking/agreement as date of buying new flat and exemption under section 54 is provided. See one such example here.
So As you have booked a new flat within applicable time period, you can exemption for the same.

2.As you have already paid 23.7L towards new flat purchase, you now will have to deposit only remaining 4.3L into capital gain deposit account scheme in a nationalized bank. This deposit will have to be used within next 2 years to make payment towards new flat.

Pankaj Batra5212
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