capital gain on sale of plot where installments were paid during number of years

[Rahul Bagaria]

Hi I have a query : OLD PLOT - Total Cost - Rs. 19.2 Lacs Bought in Dec 2002 Paid for in installments over 6 years Possession in April 2006 Sold in Dec 2009 for Rs. 60 Lacs NEW PLOT - Total Cost - Rs. 98 Lacs Bought in Dec 2009 FLAT - Total Cost - Rs. 40.2 Lacs Booked in August 2008 Allotment Letter issued in Sept 2008 Full payment made to builder in Sept 2008 Agreement signed with builder in Feb 2009 The issues are: Will the flat be treated as 'SECOND HOUSE' in case I build a house on the new plot? If the flat is a second house, will I be ineligible for relief under Sec. 54(F) on long term capital gains if I construct a house on the new plot? In a situation where I want to offset the gains against the flat (and ignore the new plot), will it qualify? The doubt is because the 'ALLOTMENT LETTER' for the flat was issued in Sept. 2008 and this is before the one year period of the old plot being sold in Dec 2009.

[CAGOPALJI AGRAWAL]

Dear Rahul, Your query needs various other facts hence may not be opined under the forum.

AI Summary

Capital gains exemption under section 54F: allotment timing and second-house character of a flat can affect eligibility.
Sale of an old plot in 2009 generated long term capital gains; taxpayer had earlier booked and paid for a flat in 2008 and purchased a new plot in December 2009. Key operative question is whether the earlier allotted flat constitutes a second house (affecting eligibility) and whether it or the new plot qualifies as the replacement asset for relief under section 54F, noting potential timing issues between allotment, payment, possession, and the one year rule.