Want to know income tax rule on monitory benefit after selling flat and could not able to buy new in same FY?



I want to sell my flat which is on loan and buy new one within few months.
Is it must to buy new flat in same FY to save income tax on monitory benefit? or
What is time limit for buying new flat?
If I could not buy new flat in same FY then what are ways to save income tax?

Want to know income tax rule on monitory benefit after selling flat and could not able to buy new in same FY?
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One Reply to “Want to know income tax rule on monitory benefit after selling flat and could not able to buy new in same FY?”

  1. The exemption under the Section 54 is available only to an individual or a HUF who transfers (or sells) a residential house/property that results in a long-term capital gain, and then invests the amount of gain in acquiring a new residential house. This exemption is available subject to fulfillment of the following requirements:
    (i) The transferor shall be an individual or the HUF,
    (ii) The asset to be transferred must be of long-term capital asset, being buildings or lands appurtenant thereto, being a residential house,
    (iii) The income from such residential house shall be assessable under the head “Income from House Property”,
    (iv) The transferor assessee should purchase a residential house in India within a period of one year before or two years from the date of transfer or construct a residential house within three years from the date of the transfer of the original house. (Construction must be completed within these 3 years.), and
    (v) The new house property purchased or constructed has not been transferred within a period of three years from the date of purchase or construction.

    Amount of Exemption. The amount of exemption under section 54 is
    •Equal to the amount of the capital gain if cost of new house property is more than the capital gain, or
    •Equal to the cost of the new house property if the cost is less than the capital gain.

    Deposit Scheme under Section 54. Where the amount of capital gain is not so utilized for the purchase or construction of a new residential house before the due date of furnishing of the return of income, it shall be deposited by him on or before the due date in an account with a public sector bank in accordance with the Capital Gain Account Scheme, 1988.

    Consequences of Selling the New House Before 3-years. If the new house property is transferred within a period of three years from the date of the purchase or construction, the amount of capital gains arising therefrom, together with the amount of gains exempted earlier, will be chargeable to tax in the year of sale of the house property. To attain this, the amount of exemption under section 54 shall be reduced from the cost of acquisition to the new house, while calculating short-term capital gains on the transfer of the new asset.

    HMT





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