Long Term Capital Gains

[Ramesh M]

I will get a Long Term Capital Gain of around 1 Crore on selling property A now.

 

I booked an under-construction property B on April 2012. Agreement value is just above 1Crore. Construction started on June 2012. Registration was done on June 2014. Construction is almost over now. I’m yet to get the keys and possession letter. I have made 90% payment.

 

As per my understanding, according to Section 54, to claim exemption from Long Term Capital Gain Tax,

1. A new residential property must be purchased either 1 year before the sale or within 2 years after the sale of the property/asset.
2. Or the new residential house property must be constructed within 3 years of sale of the property/asset

Can I claim exemption from sale of property A, if I sell it now and get possession of property B in the next two months?

 

Please advise.

 

Regards,

Ramesh

AI Summary

Can a property sale exempt you from Long Term Capital Gains Tax under Section 54 if a new property is nearly ready? An individual is seeking advice on whether they can claim an exemption from Long Term Capital Gains Tax after selling property A, by acquiring possession of property B, which was booked in April 2012. The individual has made 90% of the payment for property B, with construction almost complete, and expects to receive the keys and possession letter soon. They inquire if this situation qualifies for tax exemption under Section 54, which requires the purchase or construction of a new residential property within specific timeframes relative to the sale of the original property.