Section 54 Exemption for Reinvestment or Purchase?

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  1. Manish Kumar Mittal

    Manish Kumar Mittal New Member

    Respected sir,

    I have a query regarding LTCG as under:

    I have sold my residential flat in 9/12 and had an LTCG of Rs. 23 lakhs. I booked a flat in 10/12 and paid booking amount of Rs. 12 lakhs and deposited balance amount of Rs. 11 lakhs in SBI capital gain account in 7/13. Since then, the builder has raised no demand due to non-commencement of construction and the balance amount is still lying in SBI capital gain account. The three years limit for investment in construction of residential house, as per rules, will expire in 8/15. In this case, whether any extension in time limit will be extended to me by IT department as part of the LTCG has been invested in property and balance is in capital gain account and I will spend the balance LTCG only on the demand of the builder. Any suggestion in this regard may please be given.
  2. gaurav_kumar

    gaurav_kumar Well-Known Member

    The law does not say that you have to reinvest but only says that you have to purchase another property.

    In your case, as you have purchased the property in the stipulated time period - therefore the exemption would be allowed.
    hp gupta likes this.
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