Dear Sir, one of the client individual sold the property for ₹ 1.76 crores, and is in receipt of long term capital gains tax, he had purchased the land for ₹ 2.00crores and availed the exemption u/s 54, saying that the residential house will be constructed within the time allowed by the act,
But the above said land has been given to builder under the Joint development agreement on the condition that the builder should give 6 constructed flats out of 10
In the above situation how to proceed?
The above trx related to the asst. year 2013-14, for which return has not yet filed
Capital gains exemption under section 54 questioned where land given under a joint development agreement and consideration is flats. An individual reported long term capital gains and claimed capital gains exemption under section 54 on the basis that a residential house will be constructed within the statutory period. However, the land has been transferred to a builder under a joint development agreement in consideration of receiving a specified number of constructed flats, raising the question whether the section 54 exemption is available and how the construction within time condition is satisfied; the return for the relevant assessment year remains unfiled. (AI Summary)
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