LTCG Exempt if amt spent on constructing a New Floor?

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  1. mitraji

    mitraji New Member

    a residential house is sold; the LTCG is utilised in constructing first floor of an existing residential house. Is the LTCG eligible for exemption?
     
  2. Karan Batra

    Karan Batra Well-Known Member

    Yes, capital gain exemption under Section 54 can be claimed if the amount is spent on construction of a new floor.
     
  3. mitraji

    mitraji New Member

    Thanks Mr. Batra. Would you be so kind as to cite some case-law or justification for your view? My impression is that adding of an additional floor is likely to be considered (by the tax-man) as 'improvement' of an already existing house and not as purchase/construction. Is there some case-law or precedent in this regard.
     
  4. Manoj Mehra

    Manoj Mehra Active Member

    Let me explain you with the help of an example

    Improvement would have been if you would have changed the flooring of the existing floor.

    However, in this case the total floor area has increased and this is construction of a new floor and not renovation of existing floor
     
  5. nan joshi

    nan joshi New Member

    Manoj, I had asked about having to file returns of a joint account - as 2nd holder .
    Whose ITR should it reflect in. Is it mandatory to reveal joint accounts if you are the 2nd holder?
    PS : This Website is truly amazing !!
     
  6. Manoj Mehra

    Manoj Mehra Active Member

    In case of joint bank accounts - the first holder shall disclose it in the ITR and the 2nd holder is not required to disclose the same in the ITR
     
  7. nan joshi

    nan joshi New Member

    Thanks very much Manoj . I was also just informed by a Bank employee that you only have to file your operative accounts in the last 365 days & need not file dormant ones . Isn't there one common blanket rule ?
     
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