ganapathy (sdf) 08 February 2010
I purchased a land by selling my house few months ago. I have started constructing a house on the land using my savings. Since, the money is not enough for construction, i am planning to sell my another apartment.
My query is can i show to IT dept that i have used the proceeds from the two properties to buy a land and construction of house on the land? pls clarify
A V Vishal (Advocate) 08 February 2010
In the Instant case you can claim the benefit of Capital gains from any one property and not both the properties, hence the sale from which there is more liability on account of capital gains can be considered as an investment and the other offered to tax.
Vineet (Director) 08 February 2010
You can very well claim exemption u/s 54 in respect of both the properties sold provided other conditions prescribed in that section are satisfied i.e. the time limit within which the new house to be constructed and in absence of completion of construction, parking of funds in Capital Gains Account.
The exemption u/s 54F is limited to funds invested in new house. In your case you have to compute long term capital gains in respect of both the sold houses and if the sum invested in new house is more than the combined capital gains such computed, the entire capital gains is exempted in your hands.
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