Capital gains

Dear Ankita,

1. Yes…the exemption u/s 54 is allowable. There is  no such restriction.
2. The capital gains tax is chargeable on the gains amount since, this will be application of income after its accrual. Also, if the same is used for other than investment in a property, the exemption u/s 54 will also not be allowed.

Thanks Ankit.

But if the person doesnt have money, as entire sale consideration is utilised to discharge liabilty, from where shall he pay tax??

You are welcome Ankita,

 unfortunately, there is no answer to this question…the tax is a statutory liability and has to be discharged.

If the sale proceeds are utilized for the discharge of liability, it becomes application of income and tax has to be paid on the same.

Also, to tell you, if the sale proceeds are over 50 lakhs, the buyer would have deducted TDS on the same….to that extent, your liability will come down.

Thanks.

you are welcome...

incase you have any queries...please ask....

suppose the asset is sold in may 13, what are the dates latest by which the capital gain should be invested, whether in bonds or CGAS or investment in another house property??

Thank you

the investment should be made on or before the due date of filing of the return.

So, incase the property is sold in May 2013, the AY will be 2014-2015. The investment thus, should be made before 31 july 2014

But as per SEC54 investment in another flat can be made within 2years from date of transfer.

isnt it??

Than y before 31st july??

Correct,…but the exemption will be under 54 for you…

54 says as under: 

In order to avail the exemption, gains are to be reinvested, before the due date of return u/s 139(1). If the amount is not so reinvested, it is to be deposited on or before that date in account of specified bank/institution and it should be utilised within specified time limit for purchase/construction of new asset.

Hence the investment is to be made either in the new house or in the CG account before 31 jul

Have also sent you a Pvt. Msg…pls Check

how do you define utilisation within specified time limit??

pls correct me if i am wrong,

IF the assesse cannot invest within due date than he should deposit amount in CGAS, & than he can utilise that amount to purchase a flat within 2 yrs from date of transfer.

pls comment

Yes you are right

Utilisation means either you purchase the new property or you invest the money in the special capital gains account.

This account can then be utilized to buy the flat.

So that means for now assessee have to now deposit in CGAS account if he doesnt buy another house property  before due date & than invest in another house property within 2 yrs from date of transfer

Right ???

No…

Till 31 jul 2014, either buy a house…if that is not possible, invest it in CG account..

Nothing to be done now…you have time till 31 jul 2014