About capital gain

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

31 October 2011 By the sale of ancestrial property long term capital gain is about 65 lakhs.
Please advice:

1.
I want to invest upto Rs 30 lakhs only in the purchase of flat/house/ or plot for construction.

2.
Can i invest the balance amount of its 35 lacs approx in infrastructure bonds. If yes, then please advice which infrastructure bonds will be more beneficial and also there rate of intrest.

Regards

Ravikant

Ravikant (Expert)
Follow

31 October 2011 both options allowed

invest in bonds of NHAI or REC

for more details :

http://recindia.nic.in/download/Issue_Highlights_54EC_2011_12.pdf

http://www.nhai.org/bonds1.html

Message likes : 1 times

Querist : Anonymous

Querist : Anonymous (Querist)

31 October 2011 Thank You Ravikant.
Please clear my doubt:
could i invest in both options, i.e plot and bonds same time to get the tax benefits.

or

only one option is allowed for tax benefit, i.e either invest in property or bonds.

regards

Upgrade to CAclubindia Pro. Subscribe Now!

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
Follow

07 November 2011 You can enjoy the benefit by investing in Both the options. In case of investment in Bonds you have to follow 6 months limitation period Whereas you may invest in Residential Property till 31.07.2012, in case the property has been sold in FY 2011-12.

Message likes : 1 times

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
Follow

07 November 2011 Further, in case the property sold is Residential Property, then only the above would apply. For other than Residential Property, exemption U/s 54F will be available and that requires investment to the extent of sales consideration.

Message likes : 1 times

Ravikant

Ravikant (Expert)
Follow

07 November 2011 both options allowed simultaneously,,
agreed with above advice,,

Querist : Anonymous

Querist : Anonymous (Querist)

10 November 2011 Thank you Paras nd Ravikant for your kind replies.

Please let me know:
As rate of intrest of Capital bonds are very low, is it wise to invest in them?

or

In which conditions do you suggest to invest in capital bonds?

Regards

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
Follow

10 November 2011 I also feel so that the interest in bonds is low as well as taxable also.
.
In case the funds can not be utilised in an efficient manner by keeping them in hand, or by investing in other avenues higher earnings are not possible, it is better to
preserve the funds in this way.
.
By paying taxes, your 20% CG will depart from you. By investing in CG Bonds you not only save it but also get return on it.
If you think in this way, the rate of return slightly comes up and become comparable with other safest investments.
.
You may require the funds for construction
also except the plot. Keeping the requirement of construction exp.in mind, you may deposit the amount in Capital gains Account. Balance you may invest in the Bonds.

Upgrade to CAclubindia Pro. Subscribe Now!