date of acquistion of under contruction property

[jatin Gandhi]

One of my relatives has sold a land and is planning to purchase a under construction house to claim deduction u/s 54F. The agreement for the new house would be executed immediately and 100 percent payment would be done upfront. I have following queries related to the same:

1) In case if the person is already holding 2 properties, then is it feasible to sell one of the house and claim deduction under section 54 and 54 F simultaneously.(This is to be done as there is condition to claim deduction u/s 54F that the person should hold not more than one property on the date of claiming deduction u/s 54F)

2) If the person decides to sell the new house after 3 years, then would the date of acquisition be date of agreement of new house or date of possession.

3) in case if the builder fails to give possession within 3 years from the date of original transfer of plot, then would the capital gain deduction claimed under section 54 F be added back

[DR.MARIAPPAN GOVINDARAJAN]

Whether you have got clarified in the above issue? If not please inform.

AI Summary

Capital gains exemption: questions on eligibility, acquisition date for under construction property and clawback on delayed possession. The document presents three operational issues concerning capital gains exemption for investment in an under construction residential property: (1) whether a taxpayer holding two properties may sell one and claim concurrent exemptions given the holding limit condition for reinvestment relief; (2) whether the date of acquisition for an under construction property is the date of agreement (with upfront payment) or the date of possession; and (3) whether delayed delivery of possession by the builder within the prescribed period necessitates adding back the previously claimed exemption.