Oct 2015: Registered agreement to purchase under construction flat. Paid initial installment. Possession will be in Dec 2018 Dec 2017: Sold another flat and LTCG from that sale computed to be 11L post indexation I still have 25L installment pending with builder of the new property before the possession in 2018. Will my 11L LTCG from sale of existing property be allowed as relief under 54F? Will the date of agreement to sale be considered as purchase date or can I use the installment payment or possession date for purposes of 54 relief?
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ITAT held that date of final occupation of the property should be considered for calculation the period of eligibility for deduction u/s 54 of the Act
2)High Court in the case of CIT v. Smt. Beena K. Jain [217 ITR 363] held that the date of possession of new residential premises is to be considered as date of acquisition instead of the date of sale agreement or the date of registration.
3) you can claim relief for long term capital gains of Rs 11 lakhs
1)Exemption under Section 54 is available on long-term Capital Gain on sale of a House Property.
(2)Exemption under Section 54F is available on long-term Capital Gain on sale of any asset other than a House Property.
A new residential house property must be purchased or constructed to claim the exemption
The new residential property must be purchased either 1 year before the sale or 2 years after the sale of the property/asset.
Or the new residential house property must be constructed within 3 years of sale of the property/asset
If you are not able to invest the specified amount in the manner stated above before the date of tax filing or 1 year from the date of sale, whichever is earlier, deposit the specified amount in a public sector bank (or other banks as per the Capital Gains Account Scheme, 1988).
Only ONE house property can be purchased or constructed.
Exemption under section 54F is available on LTCG on sale of property other than house property
You can certainly claim relief for LTCG for your 11 lakhs
GOPAL VERMA
ADVOCATE ON RECORD
SUPREME COURT OF INDIA
You can definitely claim relief for LTCG of Rs. 11 Lakhs.
It has been held by the court that date of final occupation of the premises shall be taken into consideration for the purpose of calculation with regards to section 54 of the Act.
Regards
