Capital gain arising from selling Multiple property can be used for one residential property us 54f?

[richmondjema]

I am selling my urban agriculture land ( capital asset ) spread across various sections thus there will be different sale deed for every area that falls under land. Let's say 5 diff sale deeds.

If I combine 5 diff net sale consideration and use It for buying of one residential property us 54f, will I be able to eligible to claim the deduction considering I am fulfilling all the norms that I do not own more than one residential property other than new asset that we are supposed to buy to claim deduction ?

Second, if I am not able to purchase residential property before itr filing date then I need to deposit net sale consideration into CGAS account. Can I use that amount in next financial year and claim deduction along with the amount which I'll be selling another piece of land ( earlier X amount and next FY amount Y)
X+Y amount us 54f to buy one residential property.?
Please enlighten me more.

 

[davewilson]

@richmondjema To my knowledge, answer is YES for both questions. Please consult a CA. Yours seems to a high value transaction and if you are going to get cash in hand and deposit, you'll be notified by IT Department.

 

[richmondjema]

@davewilson I won't deposit cash

 

[rn60]

@richmondjema Clear tax article

 

[heliumskylark]

@richmondjema Yes you can combine all the sale proceeds and invest in one single residential property and it will be considered valid @burning___bush 54F.

Yes you can combine X and Y amount from sale of capital asset in different years and invest into a single property as long as you don't violate the condition of buying residential property within 2 years of the date of the earliest transfer of capital asset.

 

[richmondjema]

@heliumskylark But what to fill in ITR 2 in let's say first year ? Do we still need to claim that amount in exemption if we put it in CGAS?

 

[heliumskylark]

@richmondjema Yes, claim exemption in first year if money is put in CGAS. If you don't use the money, then you can pay capital gains tax in the second year. If money is fully used in second year, then there is nothing more to show in ITR in second year.

 

[richmondjema]

@heliumskylark But while claiming exemption in second year won't that be violate clause of section 54f ( assessee should not own more than one asset, apart from new asset which earlier he claimed exemption on the date of transfer of newly sold asset ( in next FY year ))?

 

[heliumskylark]

@richmondjema I don't understand your question. You are not claiming anything in second year. Exemption must be claimed in first year itself if your intention is to purchase house within 2 years and you have put money in CGAS. In second year, you will not report any gains and neither will you claim any exemption.

 

[richmondjema]

@heliumskylark Sir I am also selling one property in second year. And both net sale consideration I want to invest in combination to make exemption under section 54f. ( Same house).

 

[heliumskylark]

@richmondjema Alright, in that case you can file your returns in first year and claim exemption on the sale proceeds of the first property and in second year, file ITR and claim exemption for the amount for which you sold the second property. Entire sale consideration in both years must be put in CGAS unless you were able to utilize it fully before tax filing due date.

You will not be in violation of the rules as long as you only have one residential house and you are using all the proceeds from the sale of multiple capital assets to buy or construct another house.

 

[wisaak]

@richmondjema 2 years is the validity to save tax on re-investment in property. Not sure abt 54f but u can save collectively sale and single purchase. But take care agriculture land is on other side vs residential/commercial for capital gain tax saving.