19 September 2012
I had been inherited with an agricultural landwhich I had converted to Non-agriculturalplots in 2009 and then I had sold some of theplots to more than one person (different-different purchaser) in 2009, 2010, 2011 &2012 (the major share of amount has comefrom the plots sold in June 2011 till March2012). The amount which I received from thesale was Invested in an under constructionresidential flat in June 2011, the agreementvalue for the flat was Rs. 27 Lacs. And theamount which I received after the sale ofplots was approximately Rs.24 lacs. Now Iwanted to know if I could claim forexemption u/s 54F or this will be treated asbusiness income.Kindly provide your expert opinion in thisregards.
19 September 2012
the amount will be computed each year and the capital gain will be calculated accordingly and you can claim exemption U/s 54F for all the Years but to exempt your gain for the year 2009 you need to get the construction completed by 2012 (i.e Within 3 Years) but the amount not utilized till date should have been invested in the capital gain account scheme every year
20 September 2012
If you had converted land with the intention to business then it will be busuness and no exemption can be claimed. To give more focus on activity if you have purchased and sold any plot other then this also then it has to be considered as business income and exemption can not be claimed but you can claim the expenses as expenditure as you are in to that business. If no then you can claim the exemption. Conversion has no effect on the transaction.
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