If you operate a business that buys and sells items, your gains from such sales will be considered business income and taxed as business income rather than capital gains.
For example, many people buy items at any stores and garage sales and then resell them in online auctions. Do this in a businesslike manner and with the intention of making a profit, and the IRS will view it as a business.
The money you pay out for items purchase is a business expense, the money you receive is business revenue and the difference between them is treated as income, subject to the same taxes as income from Business.
To be eligible for the capital gains exemption, the income tax assessee must be an individual or HUF (not a company or LLP or partnership firm or other types of legal entities). Further, the asset transferred should be a long-term capital asset – a residential house property.
Within a period of one year before or two years after the date of transfer of old house, the taxpayer should acquire another residential house or should construct a residential house within a period of three years from the date of transfer of the old house. Finally, the taxpayer can claim capital gains exemption for only one residential house property purchased/constructed in India. If more than one house is purchased or constructed, then exemption will be provided for one house only.
Prohibition on Sale
If a person has claimed benefits under Section 54 during the sale and purchase of new residential property, then he/she has certain restrictions on the sale of the new house. If a taxpayer transfers the new house within a period of 3 years from the date of its acquisition/completion of construction, then the benefit granted under section 54 will be withdrawn.