Exemption of Capital Gain u/s 54

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Pratiksha Rathod 29 March 2021

A person purchase a new flat before one year of selling his old flat, new flat is under construction, possession will given after five years by the builder. He will paying installments as per agreement with the builder.is he eligible for exemption of capital gain tax under section 54 of income tax act.

Sourav (Student) 29 March 2021

The seller should purchase a residential house either 1 year before the date of sale/transfer or 2 years after the date of sale/transfer. In case the seller is constructing a house, the seller has an extended time, ie. the seller will have to construct the residential house within 3 years from the date of sale/transfer. In case of compulsory acquisition, the period of acquisition or construction will be determined from the date of receipt of compensation (whether original or additional compensation)

prasad Nilugal (Sr . Accountant and GST Practitioner . ) 29 March 2021

Agree with Sourav , one of the condition under section 54 is , Your New residential Flat Should be Constructed with in Three years from the date of Transfer (sale ) and second condition is you can not sale new Flat within three years .