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Investing Capital Gain: When Does the 3-Year Lock-in Start?

Mihir Tanna |964 Answers |Ask -Follow

Tax Expert - Answered on Sep 09, 2024

Mihir Ashok Tanna, who works with a well-known chartered accountancy firm in Mumbai, has more than 15 years of experience in direct taxation.
He handles various kinds of matters related to direct tax such as PAN/ TAN application; compliance including ITR, TDS return filing; issuance/ filing of statutory forms like Form 15CB, Form 61A, etc; application u/s 10(46); application for condonation of delay; application for lower/ nil TDS certificate; transfer pricing and study report; advisory/ opinion on direct tax matters; handling various income-tax notices; compounding application on show cause for TDS default; verification of books for TDS/ TCS/ equalisation levy compliance; application for pending income-tax demand and refund; charitable trust taxation and compliance; income-tax scrutiny and CIT(A) for all types of taxpayers including individuals, firms, LLPs, corporates, trusts, non-resident individuals and companies.
He regularly represents clients before the income tax authorities including the commissioner of income tax (appeal).... more

Question by Himanshu on Sep 06, 2024Hindi

Money

I earned capital gain of 234 lacs in August 2022 on sale of my house. I invested rupees 239 lacs in the purchase of a new flat costing 334 lacs on 9th November 2022 jointly with my son. My son paid 84 lacs on 9th November 2022 ( Total 323 lacs) and sale agreement was registered on 11th November 2022. My son paid the remaining 11 lacs on 1st August 2023 and the possession was given by the builder on 3rd August 2023. My question is, from which date lock-in period of 3 years will start for my exemption claimed for the capital gain reinvested under section 54. From the date of registration of sale agreement i.e. 11th November 2022 or from the date of possession i.e. 3rd August 2023.

Ans: Person claimed exemption u/s 54 should not transfer new asset within 3 years from its purchase or construction. Thus, in your case 3 years start from date of possession (date on which construction completed)

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.

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DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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