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The Economic Times
The Economic Times
Neelanjit Das

Man constructs a house before selling his old property and claims income tax exemption under Section 54; Income Tax Department sends notice; he wins case in ITAT Delhi

ITAT ITAT Delhi Income Tax New Delhi Suresh Surana Tax Exemption the Income Tax Department Tilak Nagar AO CIT

When Mr Kumar from Rajouri Garden, Delhi sold his property in Paschim Vihar for Rs 53 lakh, he did not pay any income tax. Instead he used the long term capital gain (LTCG) from this deal to construct a house in Tilak Nagar and for this he claimed Section 54 tax exemption while filing his income tax return (ITR).

To tell you in a brief, this Paschim Vihar property was purchased on July 20, 2005 for Rs 6.48 lakh (including stamp duty). The property was sold on October 9, 2013 and since the property was held for more than 36 months, the resulting gain was a Long-Term Capital Gain (LTCG).

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