Capital gain exemption - purchasing one big plot from sale consideration of 3 plots

[shyamal roychowdhury]

My client has three small plots of land . In one plot a small one room is also exists. He is holding all the plots over 5 years . He wants to sell all the three plots at one date & purchase one big plot/one big house using total sales consideration of three plots/house . can he not get capital gain exemption when the entire sales consideration of three plots/ are utilised for one big house / one big plot Thanks . If any one can address the problem .

[Rama Krishana]

If you read the section 54 and Section 54F of the Income Tax Act, you would find that section 54 says capital gain from sale of a long term capital asset is eligible and under section 54F capital gain from the sale of any long term capital asset is eligible. Therefore, in my view, you can claim the benefit of exemption u/s 54 read with 54F together for purchase of a eligible house property.

[JainPal Jain]

your client will get full exemption of capital gain on sale of the three plots.

[DEV KUMAR KOTHARI]

Sale proceeds of long-term plots can be invested in new residential house to get exemption, subject to meeting other conditions. investmetn in cerain bonds is also permissile (upto Rs.50 lkah in a year) so one can plan to sell old plots in two previous years.see. section 54, 54F, 54EC. The sale of old plots will be subject to S. 50C, therefore, some notional capital gains may also be taxable. You need to plan disinvestment as well as investment properly.

[RAJESH DHANDA]

yes it will be fully available for exemption u/s 54 & 54f

[RAJESH DHANDA]

fully availble u/s 54 and 54f

AI Summary

Capital gain exemption when proceeds from sale of multiple long-term plots are reinvested in one residential property.
Capital gain exemption is available where proceeds from sale of multiple long term plots are invested in a single eligible residential house, relying on Section 54 read with Section 54F; full exemption depends on satisfying reinvestment, holding period and other statutory conditions, while alternatives such as investment in specified bonds and the notional valuation rule may affect planning and taxable gains.