Section 54 fof IT Act

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  1. Rangarajan S

    Rangarajan S New Member

    Dear Sir: I own a plot of land purchased from a Registred Coop Society. I paid Rs 20000/ as full cost of a 2400 Sft plot on 31 3 1989. But due to various reasons layout making and CMDA approval was resolved only in 2012. On 4 10 2012 , I was allotted the plot but I changed the plot to my liking on 4 10 2013. Sale was registered on 23rd March 2014 showing the sale consideration as Rs 20000/ fully paid in 1989.

    Market value today is 80 Lakhs plus. I now wish to sell the plot and buy a resale flat (3-4 years Old) for full value of Capital Gains.

    Short questions are:

    1.What is the effective date of Purchase of Residential Plot for computation of LTCG period of 3 yea ? Is it 31 3 1989 or 4 10 2012 or 4 10 2013 or 23 3 2014 ?

    2.What is meaning and scope of the word "New Asset " mentioned in Sec 58F ? Does it mean the flat or house should be new ? or does it merely distinguishes the old asset of plot of land and the new asset of 4 year old flat?

    Kindly clarify and oblige.
    S Rangarajan
    [email protected]
    09840015710/091766 15710
  2. V K Khanna

    V K Khanna Active Member

    Date of allotment of plot would be considered as the the date of acquisition of asset for the purpose of calculating capital gains.

    New asset under Sec 54F is a residential flat or a house to be purchased out the sale proceeds of the previous asset ie plot to be sold.
  3. Rangarajan S

    Rangarajan S New Member

    Thanks a lot. The specific questions still remains unclear : Does the term " New Asset" means a brand new flat ? If not, can the entire proceeds be invested in an old flat (Resale Flat as called in Chennai ) and still Sec 57F exemption will be eligible?
  4. V K Khanna

    V K Khanna Active Member

    New asset doesn't mean brand new house. Law only provides that so long as the sale proceed in invested in the purchase a residential house, exemption under Sec 54F is available to you.
  5. Rangarajan S

    Rangarajan S New Member

    Thanks a lot Sir, I appreciate your express response.

    PREM KISHORE L New Member

    I have sold ancestral property in Aug-2013 and booked a flat at Bangalore to avail LTCG 54F. My apartment is still under construction. I wanted to register my flat before Aug-2016
    (before 3 yrs of sale transaction). Now the builder wants one more year to complete. He is prepared to get the flat registered at my convenience to avail 54F benefit. He wants the entire amount including salelstax @5.8% and Vat @14.5% to be paid before registration. Apartment is still under construction with good lot of work pending about 50%.
    Under such circumstance (1) Is there any provision to extend the time limit for one more year to avail 54F.
    (2) Should I pay ST & VAT in advance.
    (3) Is registration allowed before the project is completed. (4) Is OC is a must to avail 54F benefits.
    Thanking you,
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