When the Capital gain tax becomes payable and at waht Rate

I enetred into an agreement to sell my ancestral agricultural land on 29th March 2011 and received a token amount on that date itself. Full consideration was to be paid by 30.09.2011. But the buyer failed to pay full amount by the said date, though paid some partial amount. On expiry of last date, the price was renogotaited and part payments started comming in but could be completed only in May 2012. On effecting full payment in May 2012, the Property has been registered in the name of the buyer.

In the anticipation of funds comming in I have booked a Residential Flat in a Metro and have been paying the instalments of flexi payment, partly from the funds received from the Buyer of my Agricultural Land and partly from my own savings.

The Flat in the Metro is yet to be handed over to me. Please advise the treatment to payments received from the buyer of my agricultural land and payments made to the builder of the Flat in Metro.


asked Jul 18 '12 at 15:16 by NEIL 111

As property was transferred only in May 2012, long term gains would be applicable in FY 2012-13.

Now as per section 54F, in order to save income tax from capital gains, you can buy a residential house property within two years from date of transfer of old asset. As you already bought a new flat, make sure you get possession of same before May 2014.

If possession of new flat is not taken before 31st July 2013 (last date of income tax return filing for capital gains year), then you would need to open a capital gain scheme account and deposit sale consideration amount into that.

In case new flat cost is more than sale consideration of old land, then there won't be any income tax payable u/s 54F.

There are some conditions for 54F applicability:

  1. You should not be owning more than one residential house property at the time of sale of land.
  2. New flat should not be sold in next three years of possession.
  3. In next three years, total residential house properties owned by you cannot be more than two.

answered Jul 18 '12 at 18:52 by Pankaj Batra 5.2k320


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Asked: Jul 18 '12 at 15:16

Seen: 1,633 times

Last updated: Jul 18 '12 at 18:52