Sec 54 EC

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

28 May 2010 Dear Group Members,

One of my client has made capital gain on surrender of tenancy rights amounting to Rs.1.50 lacs. The transaction (transfer of long term capital assets) took place on 05.03.2010. In order to avail exemption from payment of tax on such capital gains, he is planning to invest the amt of capital gains in NHAI / REC Bonds as specified u/s 54EC of the I T Act.

To my knowledge, Section 54EC envisages for investment (of amount of long term capital gain) in NHAI / REC Bonds within a period of 6 months from the date of transfer of long term capital assets.

Here the date of transfer of long term capital assets is 05.03.2010.

Thus as per the above Section, my client has to invest the amount of capital gains in NHAI /REC bonds within 04.09.2010. If it is so, that's fine.

But, I am getting stuck at the point that the due date of filing return of income for the assesement year 2010-11 for my client is 31.07.2010.. Now, if he invests the amount of capital gains after filing return of income for the asst year 2010-11 in which he has made the capital gains, whether he can claim exemption.

The reason for my doubt arises only because of the fact that under Section 54, 54F, etc. it is stipulated that the amt of capital gains if not invested in the new residential house before the due date of filing of return of income, will have to keep the amt in any deposit account of a public sector bank in accordance with Capital gains Account Scheme.

I would request esteemed members of the group to kindly throw light on the above issue at their earliest possibility.

E V SRI KRISHNA

E V SRI KRISHNA (Expert)
Follow

28 May 2010 Don't file the return, unless the investment is made. You can file belated return, which does not create any serious problem. If you file the return, then you need to file a revised return. However, all returns cannot be revised. Only discovery of omission or misstatement in the return filed, allows the revision. In your case, when you did not made the investment, and filed the return, the same cannot be either omission or misstatement. Therefore, wait till the investment is properly made and accepted by NHAI/RECL and then file the return.

Querist : Anonymous

Querist : Anonymous (Querist)

28 May 2010 By filing belated return he will be losing carry forward loss of the current year.

Any other relpy???

Upgrade to CAclubindia Pro. Subscribe Now!