Exemption under Section 54 (Long Term Capital Gain)

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  1. Shrichand Sachdev

    Shrichand Sachdev New Member

    I have sold one part of my house in December'15 which was constructed in the year 2011 and have purchase one residential land on 31st March'16 for construction of new house. Will I be eligible for Capital Gain exemption under section 54 ?
     
  2. ZED

    ZED Well-Known Member

    Deposit the amount in Capital Gain Account Scheme and claim exemption while filing the return.
    Exemption is not available merely for buying the land, construction should also take place.
     
  3. Shrichand Sachdev

    Shrichand Sachdev New Member

    Thanks for your reply. As I have bought the land for construction of new house (apart from one house I already own) and as per section 54, the construction can be completed within 3 years from transfer (sale) of property. My consultant has suggested that the Capital gain earned on the property sold has been invested in land so I do not need to deposit the capital gain amount in 'Capital Gain Account Scheme', only I have to make sure that the construction of new house must be completed within 3 years. Kindly suggest. Regards
     
  4. ZED

    ZED Well-Known Member

    If the entire amount of capital gain was invested then it's alright, no issues, but if entire capital gain amount was not invested then you need to deposit the remaining amount of capital gain in C.G.A.S.
     
  5. Shrichand Sachdev

    Shrichand Sachdev New Member

    Thanks for prompt response. The entire amount of Capital Gain has been invested in land purchase and I will construct the house within 3 years, hope with this no capital gain liability arises on this transaction.
     
  6. ZED

    ZED Well-Known Member

    Yeah don't worry, but do remember to claim hte exemption at the time of filing of the return.
     
    Shrichand Sachdev likes this.
  7. Shrichand Sachdev

    Shrichand Sachdev New Member

    Sure sir and thanks for your advise. :)
     
    ZED likes this.
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