• Own 2 properties in 2 different states, 1 jointly in Maharashtra and other solely Uttarkhand

I want to sell the one that I own solely in Uttrakhand and reinvest into another property in Maharashtra. Will I be able to claim the capital gains exemption since I have owned the property in Uttrakhand for 20 yrs.
Asked 4 years ago in Property Law
Religion: Hindu

First answer received in 30 minutes.

Lawyers are available now to answer your questions.

16 Answers

1. Yes

2. you can invest in another residential house situate anywhere in India

3. there is no compulsion to buy a property in Uttarakhand

Yusuf Rampurawala
Advocate, Mumbai
6882 Answers
79 Consultations

5.0 on 5.0

1. YES. You will be able to claim 100% Capital Gains exemption, PROVIDED:

a) You invest in another immovable property, anywhere in India, in your own name,

b) You buy another immovable property, WITHIN 2 years, and declare the same in your Income Tax returns.

c) You can also invest in Capital Gain Bonds, AFTER proper consultation with your chartered accountants.

Keep Smiling .... Hemant Agarwal

Hemant Agarwal
Advocate, Mumbai
5612 Answers
25 Consultations

5.0 on 5.0

You can save on taxes by reinvesting the capital gains in a residential property. But you can buy only one property. The new house has to be bought 1 year before the transfer of the older property or 2 years after the transfer. If you intend to construct a property, it should happen within 3 years of transfer of the older property. If you plan to buy a property later, but not after 2 years have expired, the sale proceeds can be kept in a separate bank account under the Capital Gain Account Scheme (CGAS).

The new house should be situated in India, you can legally sell the property inUttrakhand and reinvest into another property in Maharashtra. and it should be the only residential property you own.

Regards.

Siddharth Jain
Advocate, New Delhi
5930 Answers
101 Consultations

5.0 on 5.0

You can reinvest sale proceeds in purchase of property in Maharashtra and claim

Benefit of long terms capital gains

Ajay Sethi
Advocate, Mumbai
87973 Answers
6207 Consultations

5.0 on 5.0

No. The exemption can only be claimed for one property, and that too residential.

P. S. I haven't ignored any fact mentioned by you, but my answer remains the same that exemption can be taken for One residential property only.

If the properties are existing before that, it's not an issue. For the purpose of reinvestment, one property can be bought for exemption.

Siddharth Jain
Advocate, New Delhi
5930 Answers
101 Consultations

5.0 on 5.0

Dear,

1 Yes, you claim the capital gain exemption.

2 You want to reinvest in Maharashtra, you can but you can avail tax

benefit in one property only.

Tarun Agarwal
Advocate, Jaipur
769 Answers
3 Consultations

4.9 on 5.0

Yes the property can be sold and the proceeds can be used to buy another property (residential) making you eligible to claim the capital gain exemption as well.

further, the exception under section 54 is solely for the purpose of acquiring a new residential house after selling the old one. thus, the exception is only for one property and if you have more than one property you cannot claim any exemption under section 54

Shaveta Sanghi
Advocate, Chandigarh
914 Answers
111 Consultations

5.0 on 5.0

Dear Client,

Exception u/s 54 available being central act with the condition precedent - new house purchased or constructed must be situated in India.

And co-owner is the owner of a house in which he has share and that his right, title and interest is exclusive to the extent of his share and that he is the owner of the entire undivided house till it is partitioned.

Negative in your case.- no tax exemption.

Yogendra Singh Rajawat
Advocate, Jaipur
21481 Answers
31 Consultations

4.4 on 5.0

1. s. 54 says that the capital gains are to be invested into 'a' residential house

2. so you can invest in the Maharashtra property

3. it does not say that the assessee cannot invest in a property if he already has another residential house

4. so irrespective of the number of properties you hold in Maharashtra, whether singly or jointly, you are eligible to claim the benefit of s.54 if you invest the capital gains proceeds for purchase of a residential house anywhere in India within the statutory time limit given in s.54

5. the restriction of not owning more than one residential house on the date of transfer of original asset is contained in s.54F and not s.54

Yusuf Rampurawala
Advocate, Mumbai
6882 Answers
79 Consultations

5.0 on 5.0

Dear Client,

You need to describe as to what kind of property is this whether agreeculture land or commercial.

Jaswant Singh
Advocate, Gurugram
926 Answers
2 Consultations

4.8 on 5.0

You may reinvest your long term capital gain as per your wish to save tax singly or jointly with in two year from the FY capital gain arise.

Vimlesh Prasad Mishra
Advocate, Lucknow
6848 Answers
23 Consultations

4.9 on 5.0

hello,

A person wanted to shift his residence due to certain reason, hence, he sold his old house and from the sale proceeds, he purchased another house. In this case, the objective of the seller was not to earn income by sale of the old house but to acquire another suitable house. If in this case, the seller was liable to pay income-tax on capital gains arising on sale of the old house, then it would be a hardship for him. Section 54 gives relief from such a hardship. Section 54 gives relief to a taxpayer who sells his residential house and from the sale proceeds, he acquires another residential house.

Following conditions should be satisfied to claim the benefit of section 54:

The benefit of section 54 is available only to an individual or HUF.

The asset transferred should be a long-term capital asset, being a residential house

property. Within a period of one year before or two years after the date of transfer of old house, the taxpayer should acquire another residential house or should construct a residential house within a period of three years from the date of transfer of the old house. In case of compulsory acquisition, the period of acquisition or construction will be determined from the date of receipt of compensation (whether original or additional).

With effect from the assessment year, the 2015-16 exemption can be claimed only in respect of one residential house property purchased/constructed in India. If more than one house is purchased or constructed, then an exemption under section 54 will be available in respect of one house only. No exemption can be claimed in respect of house purchased outside India.

regards

Rahul Mishra
Advocate, Lucknow
13760 Answers
65 Consultations

5.0 on 5.0

1. If you make capital gain by selling your property in Uttarakhand, then you can invest the said capital gain in buying/constructing a dwelling house anywhere in India to claim LTCG tax.

2. It is to be kept in mind that the said capital gain made by you shall have to be invested in buying/constructing only one dwelling house of yours.

Krishna Kishore Ganguly
Advocate, Kolkata
26614 Answers
726 Consultations

5.0 on 5.0

1. It is not clear as to with whom you jointly own the property in Maharastra.

2. If it is with your wife for your dwelling, then you can not claim LTCG tax exepmption by investing in buying/constructing another flat, be it in India or any part of the world.

Krishna Kishore Ganguly
Advocate, Kolkata
26614 Answers
726 Consultations

5.0 on 5.0

Yes you can avail the capital gains tax exemption by utilising the sale proceeds or the capital gains out of that sale proceeds to purchase a new property at any place in India.

T Kalaiselvan
Advocate, Vellore
78131 Answers
1543 Consultations

5.0 on 5.0

As clear from the scenario I described, my concern is that after the reinvestment I will own 2 properties in Maharashtra 1 solely and other jointly. Will the exceptions under sec 54 still apply. Please be clear. thanks

The asset transferred should be a long-term capital asset, being a residential house

property.

 Within a period of one year before or two years after the date of transfer of old

house, the taxpayer should acquire another residential house or should construct a

residential house within a period of three years from the date of transfer of the old

house.

With effect from assessment year 2015-16 exemption can be claimed only in respect of

one residential house property purchased/constructed in India. If more than one house is

purchased or constructed, then exemption under section 54 will be available in respect of

one house only.

T Kalaiselvan
Advocate, Vellore
78131 Answers
1543 Consultations

5.0 on 5.0

Ask a Lawyer

Get legal answers from lawyers in 1 hour. It's quick, easy, and anonymous!
  Ask a lawyer