Exemption u/s 54
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
04 August 2011
my clinet has sold a residential flat in april 2011 . now in the f.y. 2010 -2011 his brother's wife has made a payment to the builder . and at the year end on 31/03/2011 his brother's wife has gifted the whole amount which she paid to builder as a gift to his husband brother . Now in the may 2011 the the agreement for hosue property is registered in the name of my client . so can he claim an emexption u/s54 for a residential property which is registered in his name .
04 August 2011
sold or purchased?
if purchased then there is no complication, provided the proceeds of LTCG is used to acquire the new property.
if purchased then there is no complication, provided the proceeds of LTCG is used to acquire the new property.
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Querist : Anonymous
Querist :
Anonymous
(Querist)
05 August 2011
thanks Mr. U.S. Sharmaji
But in the above case my client has not purchased the new property .
1. Suppose : original property is sold in the name of Mr. X on april 2011 . and he has and LTCG of Y amount .
2. In the Year ended 31st march 2011 Mr. X Babhi has paid an amount to builder in the f.y. 10 -11 and on last day i.e on 31st march 2011 she gifts that whole amount to his husband's brother merely a book entry and in the book of Mr.X will receive a gift of Money which was paid to Builder and in the books of Mr. X he shows as an advance paid to builder and credit a capital by showing the gift received from Babhi .
3. Mr X Solds a his own property which was purchased in year 2002 and has arrived a LTCG in the books . Now he makes a registration on a new property which was gifted (by way of above adjustment) by his babhi . can he claim an exemption u/s 54 of I.T. Act .
My query is can Mr. X is eligible to get a exemption u/s 54 of I.T. Act though he as not paid a single rupee to the builder . or the capital gain money is not reinvested in the house property
Thanks
But in the above case my client has not purchased the new property .
1. Suppose : original property is sold in the name of Mr. X on april 2011 . and he has and LTCG of Y amount .
2. In the Year ended 31st march 2011 Mr. X Babhi has paid an amount to builder in the f.y. 10 -11 and on last day i.e on 31st march 2011 she gifts that whole amount to his husband's brother merely a book entry and in the book of Mr.X will receive a gift of Money which was paid to Builder and in the books of Mr. X he shows as an advance paid to builder and credit a capital by showing the gift received from Babhi .
3. Mr X Solds a his own property which was purchased in year 2002 and has arrived a LTCG in the books . Now he makes a registration on a new property which was gifted (by way of above adjustment) by his babhi . can he claim an exemption u/s 54 of I.T. Act .
My query is can Mr. X is eligible to get a exemption u/s 54 of I.T. Act though he as not paid a single rupee to the builder . or the capital gain money is not reinvested in the house property
Thanks
05 August 2011
as the LTCG proceeds are not used to acquire a new property, so it can not be eligible to claim sec 54 benefit.
he has two choices
1) to pay tax @ 20% after indexation benefit
2) to deposit the LTCG proceeds in LTCG account to defer the tax.
he has two choices
1) to pay tax @ 20% after indexation benefit
2) to deposit the LTCG proceeds in LTCG account to defer the tax.
05 August 2011
No benefit can be availed
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