TAX ON INHERITED LAND & SEC54 EC INVST. PLS HLP

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CS,CA F,Numrologi TusharSampat (Querist)
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12 December 2010 hello Experts ! iwant to ask you few quetion regading Capital Gain.

Q1)If i want sold Agriculturalland in Maharastra (Jalgoan.dist)from where can i get the cost of land as on 1.4.81 i.e from which relevant authority can i get valuation Documents for computing Indexed cost of acquistion?

Q2)If land is sold for Rs13 lacs n its Stamp Value in year of sale is Rs50 lacs then even after Investing Rs13 lacs in Sec 54EC-NHAI BONDS how can i save tax on balance amt?Is there any other way to save tax?

Q3)Whether this amt has to be invetsed in my Grandmothers(assesse) name only or can be invested jointly in my fathers name in order to get Deduction u/s54EC?

Q4)Whether Int rec from Nhai Bonds is Taxable? If yes in whose hands if Jointly invested?

Q5)The Buyer has made Part Payment as follows:
FY AY Rs(Chq)
1.08-09 09-10 70,000 & 50,000(cash)
2.09-10 10-11 3,00,000 -
3.10-11 11-12 2,30,000 -
In which AY DO MY GRANNY HAVE TO FILE ITR & PAY CAPITAL GAIN TAX?(STILL THE PROPERTY IS NOT YET TRANFERED IN THE NAME OF BUYER)

Q6) In case of the deal is forefieted .i.e if no transfer takes place then whether the above amt recieved is taxable under normal slab rate?

Deepak Gupta

Deepak Gupta (Expert)
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12 December 2010 Q1. First check whether the agricultural land is qualified as rural agriculutural land. if it is so, then there will be no tax.

Reply to Q2. The sale consideration will be considered as Rs.50 Lakh and investment u/s 54EC will have to be made for Rs.50 Lakhs.

Q3. The amount has to be invested in the name of the person who are the current owner of the property, i.e. who are going to execute the sale deed and who are going to receive the sales consideration.

Q4. The interest is taxable under the head other sources in the hands of the person in whose name the investments is made subject to the provision of clubbing of income.

Q5. Part payments received will be taxable in the financial year in which the assets will be transferred.

Q6. In case the advance money is forfeited, the amount received will not be taxable at all. But the same shall be reduced from the cost of the asset at the time subsequent sale of the asset takes place.

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CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Querist)
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12 December 2010 Thank You Sir for Timely answering my Querries ! On ur Reply I would like to ask you few more question.

Q1 to Your Reply 1)
I have Checked That u/s 2(14)Clause(3)-definition of Capital asset.In our case it within the jurisdiction of Local Municipal Board &as per the latest Census report of 2001 there are more than 10,000 persons alive.Hence it is not a qualified for rural agriclutral land and therefore it is a capital Asset.
My question is from which Authority can i get the Valuation of the said land as on 1.4.81?
I met Talati,URBAN VALUATION DEPARTMENT,Taluka Daharangoan,Dist Dharangoan and he repied that we don not have any records of The year 81-81 since that dept was set up only in 89-90 onwards & he therefore doesnt have record.

Q2)to your reply2)
Sir if Rs. 50,00,000 is taken as full value of consideration then even after investing Rs. 13,00,000 (the amt which we are recieving as sale value) so in this case Net LTCG COMES to 37,00,000/
But we do not have this much amt as we are selling @ low rate this due to some family reasons and ill heath of my Granny and there are no other buyers for it. So how can i save Tax on Rs. 37,00,00,000?

Q3) If in the year of Tranfer if we do not file ITR then is there any chance of IT-Dept coming to know abt this transaction which can under scrutiny
u/s143(3)?

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