Capital Gains Exemption for Purchase of Industrial Plot

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  1. ashver

    ashver New Member

    can i get long term capital gains exemption for purchase of industrial shed with my two sons after selling my residential property in my name
     
  2. rudrabose

    rudrabose Active Member

    Dear Sir

    Capital Gains Exemption is only available in case the property purchased is Residential.

    In your case, as the property purchased is not residential, therefore capital gains exemption will not be available.
     
  3. ashver

    ashver New Member

     
  4. ashver

    ashver New Member

    thanx for appropriate answer Mr.Bose
     
  5. trk1

    trk1 New Member

    I have a residential plot that I got registered in my name via release deed of my family members recently (sons..originally it was in the name of my husband and he died many years before and had not made a will that time) and then I am planning to sell to a third party this year itself...what are the options I have for avoiding capital gains tax ? Some investments in govt bonds or something is there ? Thanks in anticipation.
     
  6. gaurav_kumar

    gaurav_kumar Well-Known Member

    @trk1

    If you invest the capital gains arising from the sale, in any of the following options you can save your taxes:-

    1. Residential Property under Section 54 (to be purchased 1 year before or 2 years after sale of property)
    2. Construction of Residential Property under Section 54 (to be done within 3 years from sale of property)
    3. Purchase of Bonds under Section 54EC
    For more details on Capital Gains exemption, kindly refer: http://www.charteredclub.com/section-54/
     
  7. trk1

    trk1 New Member

    Ok..so even capital gains on sale of residential plots within the "same year" of purchase are also elgibile for Section 54/54EC assuming the new asset is another residential house or govt bonds?
     
    Last edited: Oct 10, 2014
  8. gaurav_kumar

    gaurav_kumar Well-Known Member

    Section 54 uses the word Residential House.

    A Residential Plot is not a Residential House.

    But if you can show a small room on that plot, it would be considered as a Residential House and therefore eligible for exemption under Section 54
     
  9. trk1

    trk1 New Member

    I see. If it is only a plot sale resulting in capital gains, still section 54EC is applicable assuming the new asset is govt bonds ?
     
  10. gaurav_kumar

    gaurav_kumar Well-Known Member

    @trk1

    For the purpose of claiming exemption under Section 54EC, it is not necessary that the asset sold should be a Residential House.

    Exemption under Section 54EC can be claimed irrespective of the type of asset sold.
     
    trk1 likes this.
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