LCTG on new house built before sale of old one...

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Dear Pankaj:

Thank you for your time.

I live in my own house built on a plot registered in the names of my parents and myself. We took possession of this house in April 1998.

I am now thinking of buying another plot and constructing a house on it, with the intention to move to the new house by Dec 31, 2013.

I do not want to sell my current residence before Dec 31, 2015 because I want to have the option of moving back from the new house if it does not suit my aged parents.

My question is: If I buy the plot and build a new house first, and then sell my old house how should I plan to minimize LTCG.

Will I get three years from the date I take possession of the new house to sell my current house and avoid LTCG?

What are the critical dates I should keep in mind?

Thanks again, and I hope my query falls within the purview of your forum.

Raghu

house-construction long-term-gains section-54 income-tax
1 Answers

In order to get tax benefit u/s 54, Construction of new property must be completed within three years after the date of selling house property. If construction completes before sale, deduction won't be allowed.

Pankaj Batra5212
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