Capital gain

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Patel (Querist)
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01 February 2014 dear expert

i have sold my shop, and i have earned capital gain of Rs.8 lacs with indexation

should i invest this amount to purchase agriculture plot at my home town ? or i have to invest in residential flat

regards
patel

CA Chandra Kishore Bajpai

CA Chandra Kishore Bajpai (Expert)
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01 February 2014 capital Gain would be taxable. No exemption would be available.
However you may claim exemption for residential flat provided there is no other house in your name except new house

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AVTAR SINGH

AVTAR SINGH (Expert)
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01 February 2014 You can claim exemption u/s 54F by purchasing a residential house. You will get 100% deduction if the cost of the new house is not less than the net consideration in respect of the original asset. But if the cost of the new asset is less than the net consideration in respect of the original asset, so much of the capital gain as bears to the whole of the capital gain the same proportion as the cost of the new asset bears to the net consideration, shall be exempt. In short, you will have to invest 100% of sale consideration and not only the capital gain amount to get 100% exemption.
Further, you should own maximum one residential house, other than the new asset, on the date of transfer of the original asset.

Otherwise you can go for purchase of Bonds u/s 54EC.

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Patel

Patel (Querist)
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01 February 2014 Dear mr avtar,

you mean to say if i have recd 12lacs & capital gain is 8 lacs

then i have to invest 12 lacs ?

AVTAR SINGH

AVTAR SINGH (Expert)
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01 February 2014 Yes. To claim full exemption u/s 54 F, you will have to invest full consideration of 12 lakh otherwise you will get proportional exemption. For example if you invest 6 lakh you will get 50% exemption i.e. 4 lakh.

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