Long Term Capital Gain when the new property is already purchased

nshukla 1
Viewed 1356

Hi Pankaj,

I purchased a Flat in Pune on 01st Nov 2010, and I have taken a loan for this property. Once we moved in I started to look for buyers of my property in Ghaziabad which was purchased in 2001. I signed Agreement for Sale (Unregistered)on 01st October 2011. The buyer has paid me 10% of the amount. The balance he will pay in January 2012. Now as per section 54 I can use these funds to reduce my loan amount within 1 year of purchase of new property. Can I claim benefit for this transaction under section 54? Will IT department consider the Agreement to Sale and 10% advance amount recd as Sale date? or they will go with financial year? so I purchased my property in 2010-11 and sold the old one in 2011-12, and that will be considered as 1 financial year?

date-of-transfer long-term-gains section-54 capital-gains income-tax
1 Answers

Date of transfer is considered for all income tax related computations. So the day, property is registered on buyer's name, it becomes date of transfer. There is no significance of buyer/seller agreement here.

As per section 54, to save tax, one must have either bought a residential house property before one year from date of transfer or within two years after this.

As new flat registration/possession date is before one year of sale deed of old one, it won't be eligible.

Pankaj Batra5212
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