Professionals
My client sold residential land which neither has building or any structure. He bought the same same in 2001-2002 at Rs 48 Lakhs and spent Rs 13 Lakhs for development of the land fit for sale on construction of compound wall and gravelling in 2002-2003,
He sold the land for Rs 2.786 crores in April-2021. He invested Rs 2,50 cr in residential house.
I request professionals to calculate the Capital Gain and advise to go for 54 or 54F of Income Tax
Thanks
He bought the residential house in 21st August 2021
regards
Thanks
He bought the residential house in 21st August 2021
regards
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Long term Capital Gain |
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Sale of Residential land |
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Sale date 21st Aug 2021 |
Rs. |
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Consideration |
2,78,60,000 |
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Net Consideration |
2,78,60,000 |
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Indexed Cost of Acquistion & Improvement: |
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Purchased in 2001-2002 |
48,00,000 |
48,00,000 |
2001-2002 |
100 |
15216000 |
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Expenditure |
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Development exps. In 2002-2003 |
13,00,000 |
13,00,000 |
2002-2003 |
105 |
3924762 |
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1,91,40,762 |
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87,19,238 |
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Less: Deduction u/s. 54F for Investment in new residential house |
25000000 |
78,24,155 |
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Taxable Long Term Capital gain |
8,95,083 |
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Note: 1. For claiming deduction u/s.54F, on the date of transfer, he shall not own more than one house, or shall not purchase / construct another house other than new house. |
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2. Since the asset sold is residential land, deduction is available only under sec.54F and not under sec.54. |
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Dea Bro
Thanks for your reply. How much he has to invest in Bonds to avoid tax
With best regads
You reply is very candid and clear. Please keep it up
Thanks for your encouraging feedback. The resultant taxable CG shown in my working of Rs.895083 say Rs 9 lakhs will have to be invested in Sec 54EC bonds to save the LTCG tax thereon.
Thanks. In my opinion to avoid tax , he has to invest Rs 28,60,000 being Net Sale consideration Rs 2,78,60,000 as reduced by Investment of Rs 2,50,00,000/-
Please correct me if I am wrong
With best regards
For deduction u/s. 54EC, the requirement is to invest capital gain and not consideration. Only Sec.54F requires to invest to the extent of consideration.
Thanks for the prompt reply
My client claims exemption under section 54F a
So how much must be invested Rs 9 Lakhs or Rs 28.60 Lakhs
As you mentioned the investment in bonds, I presume that it is under section 54EC, In such a case, the investment is only with reference to the capital gain ( i.e., 9 Lakhs as mentioned earlier) and not consideration. In this case, you may avail the deduction under Sec. 54F and Sec 54EC together as explained above.
Thanks and excellent.
CAclubindia
