Mr. X on sale of house property earned long term capital gain in FY 2008-2009 of Rs. 20 Lacks. He has deposited Rs. 20.5 Lacks in F.D in schedule bank capital gain tax account and claim exemption U/S 54 of Rs. 20 Lacs. in F.Y. 2008-2009.
During F.Y. 2009-2010 Mr. X has utilised out of the above depodit scheme (a) Rs. 16 Lacks for purchase of a house, and (b) Rs. 5 Lakhs (including interest of 0.50lacks on FD) purchase of land at other place and capital gain tax account closed in Feb.2010.
My question is
1) Can Mr. X by spending Rs. 4 Lacks as renovation of above second hand house purchase worth Rs. 16 lacks can save the tax on Rs. 4 lacks which arise on short utilisation of deposit for purchase building? or
2) Can Mr. X by spending amount of Rs 1.50 lacks by constructing one or two room on land purchase worth Rs. 5 lacks as above can save tax
3) Whether there is any alternative to save the tax in above situation ?
CAclubindia
