1. You can pay the money in cash also for which if you get written acknowledgement then also you will get advantage u/s 54.
2. if you buy another proeprty the capital Gain tax can be adjusted. Yes, this would be treated as new proeprty.
Exemption u/s 54
We have sold our house in 100% white money,circle rate is Rs 1.06 crore in Delhi.We are planning to purchase 1 independent builder floor.We have got multiple options.Need your advice on below queries. 1)Seller is asking for less white.We have 100% white.How can we convince him to accept complete payment through cheque as this would help us to get a deduction u/s 54. 2)If we purchase a pair of two house in common building's ground floor which have been combined into one floor with one common kitchen,entrance (two separate registry will be made)then that pair will be considered as one residential property for capital gain exemption. In Delhi these days builder purchase 2 small plots and then combine them to construct one common building with common floor.I believe that common floor should be considered one.please advice.
Asked 8 years ago in Taxation
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6 Answers
Insist on 100 per cent transaction by cheque as full sale consideration was received by you by cheque only
2) you can claim capital gains tax exemption as long as capital gains are invested in purchase of another property . It may be 2 units joined together
n Gita Duggal case (in 257 CTR 208), the Delhi High Court held that the expression ‘a residential house’ should be understood in a sense that building should be a residential one and that the word ‘a’ should not be understood to indicate a singular number. The court interpreted the word ‘a residential house’ to mean any residential house, in contradistinction to any ‘commercial house property’. Consequently, tax payers were able to claim long-term capital gains tax exemption by investing in more than one house property.
1. You can claim the exemption to the extent of money invested in the new property and other amount shall be taxable as per capital gains tax.
You do not have to agree to the vendor's dictates, you can go by your own convenience.
2. U/s 54F, purchase of one residential property is taken for exemption. If it is registered as one unit then you may claim.
After selling our house if we purchase two plots(with separate registry) but combined together as one floor with common kitchen and entrance,shall that be treated as one.Can we claim the exemption u/s 54 for both the plot with the fact that they have been combined as one floor.I have recently read a case decided in high court where its clearly mentioned that even if the plots are separate but have common entrance,kitchen then that will be considered as one and the assesee can claim the benefit on the both.However,the case law was slient on registry.It nowhere mention whether they are separately registered or not.Please help with your views.
Asked 8 years ago
in the case of ITO vs Suseela M Jhaveri 26 (ITAT Bom). It was held that if the assessee has purchased more than one residential house and the houses are in different locations, then, the assessee could claim exemption only in respect of one house. However, the taxpayer would be entitled to exemption in more than one unit, if the two adjacent or continuous units are converted into one residential house, and the two units are intended to be used as a single house for the family’s residence.
2) in your case even if you purchase 2 separate plots but combined together as one house with coom kitchen and enterance you can claim exemption under section 54
If both the flats have separate registered sale deeds, then they are to be considered as two different units for all the legal purposes.
Common kitchen and common entrance if your own convenience, but if there are two separate registered sale deeds, it can be construed that the capital gains have been reinvested into two units which is against the rule where you are eligible for reinvestment in single unit only.
You may check it up with your auditor on further issues.