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My Client Has Sale one Plot Of Land on 01/11/2017 And He Has A Long Term Capital Gain of 6,21,607/- And He Had Purchased One Residential House On 22/09/2016 For Rs 10.50.000/- As Per 7/12 It Is Registered on 04/11/2016.

As Per 54f One Year Before From The Date Of Transfer Is Eligible For Exemption. Here As Per Registration Date It Is Shorter For That 1 Year Period ( Date Of Sale 01/11/2017 And New Purchase Date 22/09/2016)  Kindly Guide For The Same Whether It Is Eligible For Such Exemption And Give Reference For Case Law If Any


Dear Sir,

If an assessee wants to claim the exemption of long term capital gain, the time limit given for the period of Purchase of Residential house property under section 54F of the Income tax act, 1961 is within one year before the transfer of capital asset took place.  Date of Registration of property would be immaterial for determining the date of purchase.

As in your client’s case the property which was acquired has not been purchased within the prescribed time limit. Although the registration date (04.11.2016) of purchased house property is within the time limit of one year as stated above, but it cannot be considered as date of purchase. Therefore 22.09.2016 will be considered as the date of purchase instead of 04.11.2016 (dates of registration).

Hence, your client can not avail the benefit of exemption under section 54F of Income Tax Act.  

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