LTCG on sale of residential property & exemption u/s. 54 EC

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shehzad (Querist)
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10 February 2010 Dear All,

One of my friend is having 2 houses from which he is going to sell 1 house. He wants to invest in capital gain bonds of NHAI or REC & claim exemption u/s. 54 EC. He is a salaried person. So, he will file returns within July 31.

The property is sold in February, 2010. So, he has to invest the capital gain within 6 months from the date of sale in bonds. So, 6 months ends in August, 2010 while return due date is till july.

My question is:

What he can do, if he does not invest in bonds within return due date & still files return within due date? Is there any way to show that as still time is left for investment, he is not liable to tax on capital gains?

Suggest some alternative to it?

Plz its urgent.

Thanks

CMA. Dinesh S Adhikari, ACMA

CMA. Dinesh S Adhikari, ACMA (Expert)
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11 February 2010 He must has to invest till the due date of filing ITR, i.e., 31st July. If he does not invest till aforesaid date then he will be liabile to pay tax on Capital Gain.

However, he can go for claim exemption u/s 54.

Regards!!!