To avail Section 54 benefit, construction of new flat should be done within 3 years

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Published: July 30, 2019 1:46:48 AM

I sold a residential property in 2011 and invested part of the long term gain in an under-construction residential property. The delivery was scheduled in October 2013. But there is no progress till date. How can I claim tax deduction under Section 54? – Ramesh

Under Section 54, you have to buy residential property either one year before the date of sale of house or within two years after the sale of residential property or within three years construct a residential property. The exemption is not allowed if a person fails to buy the residential property and as of now no relaxation is allowed against this. This needs to be analysed in the light of judicial pronouncements and you are advised to seek professional advice in this regard.

Should I submit my ITR before July 31, 2019 as usual as individual taxpayer as some profit sharing is not yet finalised? —Kirti Ayapam

This will depend on whether the firm has tax audit applicable or not. If yes, you can file your return by September 30 as applicable for entities having tax audit, otherwise you will need to file it by July 31.

As a senior citizen, I have not paid any advance tax. What shall be the impact in IT calculations? — Anand Singh

Advance tax provisions are applicable for senior citizens if they have business income. Hence, you will be liable to pay interest under Section 234B and 234C if there is any shortfall for advance tax.

If an Overseas Citizen of India (OCI) gives his inherited land to a builder in exchange for flats, will he have to pay TDS on value of flat if he wants to retain it? If an OCI sells his share of inherited land, will he require RBI permission? — SR Sequeira

It is not clear from your query if you intend to know about your taxability or if you are required to deduct TDS for the flat you get from the builder. Assuming that the builder will construct flats on the same land, the capital gains for you shall be taxed in the year in which completion certificate is received and stamp duty value for your share shall be considered as sale consider-ation and cost to the previous owner after indexation considered for calculation of capital gains. If any additional payment is made by either party to each other, such payment shall be made after deducting TDS @ 10% u/s 194IC. Further, no RBI permission is required in this regard.

(The writer is partner, Ashok Maheshwary & Associates LLP. Send your queries to

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