Capital gains Rs.50 Lakhs ceiling in 54 EC Bonds

This query is : Resolved

CA Sanjay Baheti (Querist)
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01 February 2011 An assessee is selling a property say for Rs.1 crore durung febraury 2011. whether he can invest Rs. 1 Crore in 54 EC Bonds in two financial years Rs. 50 lakhs by March 2011 and the remaining Rs.50 lakhs in April 2011 in order to calim full expemtion. As per terms and conditions of the Isuue of REC Bonds a ceiling of Rs. 50 Lakhs is Stipulated for EACH finacial year. Even if the Deposit of Rs. 1 crore in two different finacial years is accepted by REC Bons Whether the Income tax Dept can restrict exepmtion of Rs 1 crore to 50 lakhs under section 54 EC at the time of scrutiny assessment. Please reply if there is any accepted caselaw on this subject.

CA Manikandan.A.V

CA Manikandan.A.V (Expert)
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01 February 2011 It is not possible to obtain exemption for the entire 1 crore. Maximum exemption available under 54 EC is Rs. 50 Lacs only. Depositing 50 Lacs each in both years is also not accepted.