Exemption under Section 54 in case of Subvention Scheme

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  1. Kapil1965

    Kapil1965 New Member

    10 January, 2015
    Hi Experts,
    I have consulted some CAs offline and got different replies. So need someone with expertise on capital gain to answer my query.
    I had booked a under construction residential flat in October, 2010 and paid some amount as advance to the builder.On the basis of Provisional Allotment letter dated January 2011 ,builder has provided a Subvention Scheme from HDFC for financing the allotment money which is almost 90 % and balance is to be paid on possession.Subvention scheme was upto 2 year where nothing I was supposed to pay as EMI and Interest.

    In july 2012, I sold my different residential house and earned Long Term Capital Gain which I have used for repayment of housing loan in February 2013.And I have claimed deduction u/s 54 for capital gain
    Till date, the flat is under construction and registration of the property is still pending.I had got only Provisional Allotment letter.Please advice.

    Whether I am eligible for deduction under section 54 or not?
    Last edited: Jan 13, 2015
  2. rudrabose

    rudrabose Active Member

    Could you please again mention the question as only the facts have been mentioned and your question is not clear.
  3. Kapil1965

    Kapil1965 New Member

    My question is that"whether i am eligible for deduction u/s 54 or not"?
  4. Karan Batra

    Karan Batra Well-Known Member

    Have you been allotted a particular flat with the flat no. and is the area demarked from the common area?
  5. Kapil1965

    Kapil1965 New Member

    In provisional allotment letter, it is mentioned that I have been allotted Unit Reference No-I 204 measuring 3440 square ft.(super area).
  6. rudrabose

    rudrabose Active Member

    As the flat has been allotted to you, the date of allotment would be considered as the date of purchase. Therefore, Jan 11 would be considered as the date of purchase.

    As it has been purchased in Jan 11 which is more than 1 year before the sale of the flat in July 12, therefore as per my analysis - the exemption wont be applicable in this case.
  7. Kapil1965

    Kapil1965 New Member

    The allotment letter issued to us is provisional i.e. it is not original, and I have not received the possession till date, registration of property is still pending.
    Further I have transferred the capital gain for repayment of loan taken for purchase of flat within one year from sale date.

    We have already taken exemption u/s 54 and now the case is under scrutiny, so please refer some case laws in our favor ,therefore we can proceed with the case.
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