Capital Gain

I have purchased residential flat (1 BHK) 10 years back at 20 lacs, now I am planning to sell at 65 lacs. Same time I will be booking a flat in same area (2BHK) which will cost me around 100 lacs. The new flat purchase agreement will happen in May, 2012. The possession of new flat is December, 2014. As per construction status of new flat I will be have to pay Rs. 40 lacs immediately and pending as per progress. Request you to let me know if this will attract any capital gain tax? 1. As I will be selling house in 2011-12 and purchasing new in 2012-13. 2. As per builder the possession will be in December, 2014, but I think it may be happen by March 2015.

asked Feb 22 '12 at 23:35 by anup_767 1111


Your capital gains would be around 30 lakh.

In order to save income tax on this gains fully, you can buy a new residential house property u/s 54 for cost more than gains(30 lakh). But possession for new property should be taken within two years from sale date of old property.

In case possession of new flat is delayed beyond two year's period, tax benefit may not be available.

Also, in case possession is not received before last date of income tax return filing date (31st July) then you would need to deposit capital gain amount into capital gain scheme account. Payment towards new property should be paid from that account.

answered Feb 22 '12 at 23:46 by Pankaj Batra 5.2k320

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Thank you Pankaj for prompt reply. One more infromation required, if I pay all the capital gain with in one year of sale of new property and do the new purchase agreement with in six months and possession of flat is more than two years, stiil the capital gain tax is applicable?
(Feb 22 '12 at 23:52) anup_767
Purchase agreement does not matter in 54 applicability, but possession date should be within two years. If its not done, income tax would be applicable on gains.
(Feb 22 '12 at 23:56) Pankaj Batra
Thank you for relply.
(Feb 22 '12 at 23:58) anup_767

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Asked: Feb 22 '12 at 23:35

Seen: 1,107 times

Last updated: Feb 22 '12 at 23:58