Go Ad-Free on CAclubindia with Daily Mobile Updates. Subscribe Now!

Capital gain - urgent pls reply

Abishekjain (Ca Final Student) (241 Points)

14 October 2011

I Have a Vacant land in Chennai it is around 6 grounds, purchased in the Fy 1985-86 for 19k per ground, Now if i sell 3 grounds of land for 30lakhs per ground in FY 2011-12 and in the remaining portion construct a building then what will be my LTCG. what will be amount of exemption in Sec 54F can be claimed... Pls reply its urgent..

Reply
Follow
Share

9 Replies

CA Rachit Gupta (Chartered Accountant) (1315 Points)
Replied 14 October 2011

I think LTCG will be:

Sales Consideration (30 x 3) = 90 lakhs

Less: Cost of acquisition (19 x 3) = 57 thousand (subject to indexation)

Capital Gain = 89.43 lakhs

For exemtion under sec 54F:

If cost of new asset > Net consideration of asset transfered, then full amount is exempt

If cost of new asset < Net consideration of asset transfered, then exemtion will be,

Capital Gain x Cost of new asset / Net consideration

If full amount is not utilized till filing of return, then u can invest into capital gain account scheme

For claiming exemption, conditions of section 54F has to be complied with.

Thanks Yash & Roopak for correcting me...:)

1 Like

Upgrade to CAclubindia Pro. Subscribe Now!

Yash Anandkumar Mandavia (Practising Chartered Accountant) (184 Points)
Replied 14 October 2011

I fully support Rachit's reply... Just a small change... Cost of acq. will be Rs. 57000(subject to indexation)..

CA Mukul Mittal (CA in practice) (384 Points)
Replied 14 October 2011

new asset sould be a residential house...

Mihir (Wealth Manager) (5293 Points)
Replied 15 October 2011

Please check what type of ground this is with your local municipality, because grounds such as yours, could come under special zones, for which a separate permission is sought from the govt to construct a building.

Abhinav Pandey (Executive-Accounts) (94 Points)
Replied 15 October 2011

for getting exemptin u/s 54f new asset must be a residential house

Upgrade to CAclubindia Pro. Subscribe Now!

Kunal (Risk Analyst) (299 Points)
Replied 15 October 2011

@ rachit Its 19k nt 19L

CA Rachit Gupta (Chartered Accountant) (1315 Points)
Replied 15 October 2011

Thanks Yash & Roopak for correcting me...:)

CA Rachit Gupta (Chartered Accountant) (1315 Points)
Replied 15 October 2011

Thanks Yash & Roopak for correcting me...:)

Abishekjain (Ca Final Student) (241 Points)
Replied 15 October 2011

Thanks all for ur reply..

but there is another way to get better relief rather than to invest in capital gain scheme.

i.e form a partnership firm and the remaining portion which is not sold can be bought in as capital and making a condition for getting 50% of the portion constructed to give to the person who brings it and the balance portion to be shared as profit for remaining partners.. this way the house is constructed and even the money can be used effectively..