If my clients mother gifted agriculture land ( 10 years old)without consideration
to my client and said agriculture land is sold by my client to another person
then the said capital gain to my client is short term capital gain or long term
2) Capital gain out of above transaction invest
by my client in construction of house property can he claim deduction u/s 54
3) Can capital gain out of above transaction is
used for the purpose of repayment of house loan taken 1 month before??
Can he claim deduction u/s 54 F??
1) The nature of
capital gain depends on the holding period of asset, if the holding period of
an asset is less than 36 months the gain will be treated as short term capital
gain otherwise long term capital gain. In case of gift of capital asset, when
the gift recipient sells such capital asset, the holding period is calculated
from the date of purchase of such asset by donor instead of date of receipt of
gift. Therefore, capital gains on sale of gifted property will be long term
capital gains for your client.
2) Yes, your client can
claim exemption u/s 54F if investment is made in construction of residential
3) Yes, you can claim exemption u/s 54F for
repayment of loan provided that the said loan has been taken for purchase of
property within one year from the date of arising of capital gain.