Under the provisions of Section 54 of the Act, the assessee should, within a period of one year before or 2 years after the date on which the transfer took place, have purchased or within a period of 3 years, after the date of transfer, constructed a residential house. Under the provisions of Section 54EC […]
4. What is the nature of assets in which the sale proceeds should be re-invested by the assessee to avail the exemption?
Under the provisions of Section 54 of the Act, the capital gains should be re-invested in the construction or purchase of another residential property. Under the provisions of Section 54EC of the Act, the capital gains should be re-invested in ‘long-term specified asset’. For the purpose of this provision, long-term specified asset means any bond […]
3. Is there a minimum holding period for such property before transfer to be eligible for the concessions?
The residential property should be a long-term capital asset i.e. it should be held by the assessee for a period of 36 months, prior to the date of the transfer.
The exemption under Section 54 of the Act is available to an assessee who is either an individual or a Hindu Undivided Family (HUF). The exemption under Section 54EC is available to any assessee.
1. Are any concessions available under the income tax laws with regard to profit on sale of residential property?
The concession is available by way of exemption from income tax on capital gains arising on transfer of a residential property. The exemptions are provided in Sections 54 and 54EC of the Income-tax Act (the Act). The exemption is available on re-investment of the capital gains in specified assets by the assessee.