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Arindam Chatterjee (Owner)     15 November 2014

Taxation query for selling my flat..

Hi Everyone,

I have a 2BHK flat which I am willing to sell to purchase a big sized 3BHK. The flat is 2 years old.
Please suggest and guide whether I have to pay any tax for selling my flat before 3 years from the date of purchase.



 4 Replies

V M DAHAKE (PROPRIETOR)     16 November 2014

Dear Sir,

 Tax as per the Income Tax act is payable whenever you transfer and there is a gain. If you are holding it for 36 months or more, it is Long Term Capital gains ( lower tax rate); otherwise Short Term Capital gains. The exemption for reinvestment of capital gains in another residential property, is only for  assets held long term. ( Section 54 of IT Act). Please contact your Chartered Accountant for exact computation.

T. Kalaiselvan, Advocate (Advocate)     17 November 2014

This involves the taxation issues, which if not properly handled may create problems of penalty in the later stage, hence, take the help of your auditor/CA/tax consultant and proceed as per his/her proper advise on the subject.

Arindam Chatterjee (Owner)     18 November 2014

Thanks for your valuable comments..

Advocate Vipin Raturi Delhi (ADVOCATE )     22 November 2014

Capital Gain arising from the Transfer or Sale of resident house property::-

The following conditions should be satisfied


1.  The house property is a residential house.

2. Transfer by Individual or Hindu  Undivided family (HUF)

3. The House property (May be self occupied or let out)

4.Long-term Capital Gain ( It must be held for a period of more than 36 months before Sale or transfer)

5. Short-term Capital Gain( It must be held for a period of less than 36 Months or within 36 Months Sale or Transfer)

Tax Benefits/Exemption on Long term Capital Gain under section 54 of the Income Tax Act, 1961

Conditions: -

1. The assessee has purchased a residential house with in period of one year before.

2. Purchased  With in 2 years after the date of transfer/Sale.

3. Constructed a residential house property  with in period of three (03) year after the date of   transfer/Sale

Following points should also be kept in view:

(i). Date of commencement of construction is irrelvant

(ii). Construction may be commenced even before the transfer of the house

(iii) Case of allotment of a flat under the self-financing scheme is treated as construction of house for this purpose.

(iv) The house property so purchased or  constructed  has not been transferred with in period of three years.

4. Amount of Exemption:-

If the house is transferred/Sale with in 3 years:

Short-term capital Gain raise there,no benefit received under the Income Tax Act, 1961.

Long-term Capital Gain:
 Exempted under section 54 of the Income Tax Act, 1961

1. IF the amount of Capital Gain is less than the cost of the new house property, the entire amount of Capital Gain (Tax Amount) is  exempted from Tax.

2. If the amount of the Capital Gain is greater then the cost of the new house property . The difference between the amount of capital Gain and the cost of new house is chargeable to tax as Capital Gain.

For Example:

X sells a residential house at Delhi for Rs,45,00,000  on August 2012, which was purchased by him on April 5,1985  for Rs. 5,00,000

Hold more than 3 years long- term Capital Gain raised:

Capital Gains in:

Sale                                                                                                                45,00,000

Less: Indexed Cost of Acquisition (Rs. 500000*852/133]                    3203008

Long term Capital Gain                                                                                12,96,992


If he purchased before one year OR  with in 2 year any residential house Property or constructed before or after said property completed with in 3 years, said property cost above in Long term capital gain entire amount of Capital gain will be exempted under section 54 of the Income Tax Act, 1961

2. If less difference amount will be exempted.

In short term Capital Gain no benefit will be received.




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