TaxTMI 
TaxTMI 
Exemption under section 54 is allowed if the assessee purchases new house with in 2 years after the date of transfer or constructs a residential house property with in a period of 3 years after the date of transfer. My query is that if some one has invested in flat" under construction linked payment plan" will it be considered as" purchase" or is considered as "construction" The allotment letter is issued by the builder at the time of initial payment and the agreement is also entered into. The instalments are asked for as per the progress of construction and the possession will be given on completion of the project.
CAPITAL GAINS- exemption u/s section 54
17 Jul 2011 
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Capital gains exemption eligibility: investment in under construction flats treated as construction enabling section 54 relief.
Where an assessee advances funds to a builder under an allotment and agreement for construction of a flat and pays instalments as construction progresses, that investment is to be treated as construction by the assessee for the purpose of capital gains exemption; a tribunal factual finding that construction funded by the assessee through the builder is treated as the assessee's construction has been upheld as binding. (AI Summary)
Where an assessee advances funds to a builder under an allotment and agreement for construction of a flat and pays instalments as construction progresses, that investment is to be treated as construction by the assessee for the purpose of capital gains exemption; a tribunal factual finding that construction funded by the assessee through the builder is treated as the assessee's construction has been upheld as binding. (AI Summary)