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54ec

Anshul (Article) (47 Points)

23 February 2014

Hi, I have a Q about Section 54ec.. Background details- -Commercial property will be transferred before 31st march -consideration will come after 31st march (transfer is done b4 since circle rates vil increase frm april) Q is- can d proceeds be invested under 54ec? will deduction be allowed? Thank you.

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11 Replies

KRISHNAPRASAD IYER (B.Com , CA Final) (657 Points)
Replied 23 February 2014

The transfer will take place in March; i.e., FY 2013-14. The capital gain can be invested in bonds notified in sec 54EC. The point to be considered is that it should be invested in the year in which the transfer of property occurs. In other words, it should be invested in the specified bonds before March 31st 2014

Hope this helped!!

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Pradeep Gupta (Accounts Manager) (298 Points)
Replied 23 February 2014

Agreed with Mr. Iyer, if you have not invested the amound on or before due date of return filing u/s 139(1), then you have to deposit the sum in CGS account to avaik the deduction.

Anshul (Article) (47 Points)
Replied 23 February 2014

Many thanks for your replies.. I want to clarify about the last date for investment in 54ec, is it 31st march or due date of filling returns(31st july in my case) ?

Anshul (Article) (47 Points)
Replied 23 February 2014

question improvised as- "Consideration received from the sale of the commercial property is to be invested in bonds under section 54ec"

JAINENDRA JAIN (ACS/CA) (1668 Points)
Replied 23 February 2014

You have to Invest within 6 months of transfer of capital assests.

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Stranger (.) (5526 Points)
Replied 24 February 2014

Dear Anshul, deduction u/s-54EC will be allowed in case of transfer of long term capital asset, if investment is made in redeemable bonds of NHAI or RECL upto Rs.1 crore subject to LTCG, provided investment is done in 2 F.Ys (upto max. Rs.50 lakhs for each F.Y) within 6 months from the date of transfer. Moreover you cannot transfer or take any advance or loan on security of the specified bonds within 3 years from the date of its acquisition, else it will be deemed to be LTCG in the year of transfer of specified asset

Rahul jain (LEARNING & TEACHING) (435 Points)
Replied 24 February 2014

to stranger-it is not 50 thousand it 50 lacs.

Stranger (.) (5526 Points)
Replied 24 February 2014

@ Rahul Jain..thanx for the correction friend

Abhishek Kumar Mishra (CA FINALIST AND A TEACHER) (28 Points)
Replied 25 February 2014

Agree with Mr. Iyer. You have to invest within 6 months but in the same year.

Anshul (Article) (47 Points)
Replied 25 February 2014

Everybody many thanks for your replies... one last question, does it mean that if it is within 6 months(of transfer and investment in bonds), it is allowable? Change of Financial Year does not matter?

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Stranger (.) (5526 Points)
Replied 26 February 2014

Absolutely friend..6 months from date of transfer is important. Moreover, it will be more beneficial if 6 months time period ends on the next F.Y as in that case u can claim deduction of upto Rs.1 Crore, i.e. Rs.50 lakhs per F.Y.

Hope your doubt is clear now..