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capital gain for sale of land

CA lakshmikanth (Chartered Accountant) (238 Points)

05 February 2010

IF some space of land & land registred in spouse name and that husband and wife have income is below the exemption limit if that land is sold any attract capital gain plz tell me

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13 Replies

CA Amit Kumar (C.A., CWA Final) (251 Points)
Replied 05 February 2010

yes dear

if that land is sold, it will attract the capital gain iresspective of the below the exemption limit.

Becoz capital gain tax ys charged by special rates i.e. 20%, therefore wheteher the income is below the exemption limit, capital gain shall be attacted.

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Amir (Learner) (4016 Points)
Replied 05 February 2010

Dear Lakshmikanth,

Ur query can have quite possibilities, the provisions of clubbing has to keep in mind for deciding that in whose hands income shall be computed

1) CASE 1 - STATUS is RESIDENTS

LONG TERM GAIN/ SHORT TERM GAIN - IF BELOW EXEMPTION LIMIT THEN NO TAX

2) CASE 2 - STATUS is NON RESIDENTS

LONG TERM - WILL BE TAXABLE EVEN IF BELOW EXEMPTION LIMIT (EXEMPTION U/S 54F & 54 EC CAN BE CLAIMED)

SHORT TERM - IF BELOW EXEMPTION LIMIT THEN NOT TAXABLE

CA lakshmikanth (Chartered Accountant) (238 Points)
Replied 05 February 2010

thanks amir

C.Balaji (Learner) (1867 Points)
Replied 05 February 2010

Mr.Lakshmikanth

land owned by spouse and sold by spouse ....

CG will arise and it will be taxed only if it crosses the exemption limit....

i think i'm right...if wrong please point out...

Navneet (Asst. Finance Controller (Alshaya India)) (42 Points)
Replied 05 February 2010

Yes Mate.... Tht unexhausted basic exemption can be set off against this capital Gain nd balalnce will only be taxed.....

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Hareesh H Sharma (Cleared IPCC..now article) (894 Points)
Replied 05 February 2010

But Navneeth only residents can use unexhausted basic exemption against LTCG...so the residential status has to be looked as amir sir said

Navneet (Asst. Finance Controller (Alshaya India)) (42 Points)
Replied 06 February 2010

Ture.... Residential status Is to be looked.... Correct... I Presumed in this case he stand to be a resident...

Navneet (Asst. Finance Controller (Alshaya India)) (42 Points)
Replied 06 February 2010

Set off against Unexhausted permissible only for residents....

CA lakshmikanth (Chartered Accountant) (238 Points)
Replied 06 February 2010

thanks for all your valuable comments

but my another doubht is if husband and wife both are residents and sale of land, income is arise Rs 500000/-( After set off indexed cost of acquistion) is above the exemption limit

my question is

1) if any capital gain attracted

2) any set off and clubbing povisions used

3)any exemptions are there ( other than u\s 54 and 54EC)

Amir (Learner) (4016 Points)
Replied 06 February 2010

Dear Lakshmikanth,

1) Yes since income is above exemption limit

2) Yes Income will be clubbed with the income of spouse who acquired the house

3) Yes Benefit of Sec 54 & 54F can be claimed.

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C.Balaji (Learner) (1867 Points)
Replied 06 February 2010

Mr.Amir Brother...

Can 54 exemption be claimed for sale of land????

54 - transfer of Res. House and pur of res. house...

54 EC and 54 F can be claimed....

Income will be clubbed with the income of spouse who acquired the house

Max Payne (employed) (2569 Points)
Replied 06 February 2010

balaji,

Your question is thought provoking. I need an answer.....

If i sell land appurtenant to building which is assessed as income from HP, can sec 54 be claimed???

I mean if i sell land and building together, which i ealier offered as income from HP, i can invest u/s 54 blindly, but if i sell land alone, I Cant????? any lawgic???

Using a reverse analogy, if I sold L&B and invested the proceeds u/s 54, can AO say "That much gain as is related to sale of land is to be invested u/s 54F only and not 54?"

Amir (Learner) (4016 Points)
Replied 07 February 2010

First to Balaji,

Ya Brother in my post above I made a mistake since Capiat Asset in question is "Land' therefore there should have been Sec 54EC & 54F, instead of Sec 54 & 54F ...

Now to G.K.,

Brother, this is not rite Balaji has found a mistake in my post & u have taken it to raise ur query........Ha ha :)) Just kidding,

Regarding ur Query ya it's worth thinking....

But I think if Both L& B are disposed off together even then AO cannot ask to claim Sec 54F "to the extent of gain atttributable to Land' because the rule of interpretation says that "The specific provision shall prevail over the general provision" & in the present case since both L&B has been disosed off together "Sec 54 would be specific to the transaction..

Brother, ur invaluable comments r always welcome.............