If the employee purchase the Land/House on Property Loan from Employee's Co-operative society against Rural Agricultural Land or Plot or House etc. they can be claimed exemption u/s. 54F towards Long Term Capital Gain (LTCG) as well as Employee can claiming deduction u/s 24(b) and u/s 80C towards the Interest and principal repayment of the loan. The second house property for which the loan is taken is belonging to your father and resultantly, you will not be eligible for any deduction u/s 24(b) & u/s 80C towards the interest & Principal repayment of the loan taken from your employee’s co-operative society. Net Sale Consideration is invested for purchase of another residential house property within a prescribed time.
Period to Purchase the Property:
Exemption u/s 54F is available if the Assessee invests net sale consideration for purchase of a residential house property
Period to Purchase the Property:
Exemption u/s 54F is available if the Assessee invests net sale consideration for purchase of a residential house property
- within One year before or two years after the date of transfer; or
- constructs a residential house within a period of three years from the date of the transfer of the original house.
Deposits Scheme:
Although under section 54F, the taxpayer is allowed 2 years to purchase or 3 years for construction of the house property, but the capital gain on transfer of the original assets is taxable in the previous year in which the transfer took place. The return of income of that previous year is to be filed before the specified date i.e., due date. Hence, the assessee will have to take a decision for the purchase/ construction of the house property before the date of furnishing of the return otherwise the capital gain would be taxable.
To avoid the above situation, the Income Tax Act has specified an alternative in the form of a Deposit under the Capital Gain Deposit Accounts Scheme-1988 (CGDAS). The amount of net sale consideration, which is not utilized by the assessee for purchase or constructions of the new house before the due date of furnishing the return of income, need to be deposited by him/her under the Capital Gain Accounts Scheme, before the DUE DATE of furnishing the return. After Deposits, the amount already utilized by the assessee for purchase/ constructions of the new house, along with the amount so deposited, shall be eligible for exemption under section 54F in the year in which LTCG has arisen.
With above basic idea and background, opinions on your specific queries are as under:
Although under section 54F, the taxpayer is allowed 2 years to purchase or 3 years for construction of the house property, but the capital gain on transfer of the original assets is taxable in the previous year in which the transfer took place. The return of income of that previous year is to be filed before the specified date i.e., due date. Hence, the assessee will have to take a decision for the purchase/ construction of the house property before the date of furnishing of the return otherwise the capital gain would be taxable.
To avoid the above situation, the Income Tax Act has specified an alternative in the form of a Deposit under the Capital Gain Deposit Accounts Scheme-1988 (CGDAS). The amount of net sale consideration, which is not utilized by the assessee for purchase or constructions of the new house before the due date of furnishing the return of income, need to be deposited by him/her under the Capital Gain Accounts Scheme, before the DUE DATE of furnishing the return. After Deposits, the amount already utilized by the assessee for purchase/ constructions of the new house, along with the amount so deposited, shall be eligible for exemption under section 54F in the year in which LTCG has arisen.
With above basic idea and background, opinions on your specific queries are as under:
- Though you have not purchased another residential house property within the prescribed time period, the amount should have been deposited by you in the CGDAS so as to enable you to claim the exemption. The first instance of payment thereafter should have been done by withdrawing from CGDAS A/c.
- Alternatively, the payment (from PPF Withdrawals, Housing Loan etc) should have been completed before 31.07.2011. Depending upon your payment till 31.07.2011, you can have an option of claiming an exemption u/s 54F either fully or proportionately. Your part ownership in an existing house property with your husband would not have impaired your exemption claim u/s 54F.
- You don’t have any option of buying another residential house property now as the time frame for investment has expired.
