Sale of shares

This query is : Resolved

P.L.SURYA PRABHA (Querist)
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24 February 2014 There is a long term capital gain on sale of Private limited Company shares. The shares are fully transferred to the buyer. The buyer paid 90% of the considerations in this financial year and promised to pay the balance in the next financial year on completion of certain conditions. (There is a chance of forfeiting a part of this 10% withheld amount if certain conditions are not satisfied)
Now our query is what would be the sale consideration in first year? Should be take 100% or 90%? If only 90% is taken in the first year as sale consideration, then can the assesse claim 54EC (exemption of investment in capital gains bonds) for both the years separately.

P.L.SURYA PRABHA

P.L.SURYA PRABHA (Querist)
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26 February 2014 Please answer me urgently. It is most urgent. Have to plan for advance tax.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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05 March 2014 100% amount will be treated as the sale consideration will be treated.

This is because capital gain is chargeable on accrual basis. It is NOT chargeable on receipt basis.

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P.L.SURYA PRABHA

P.L.SURYA PRABHA (Querist)
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26 April 2014 Thanks and sorry for the delay in reply

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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10 July 2014 You are welcome. You should use the thanks button to convey your thanks.