There is a capital Gain of Rs.85 lakhs for an individual (Assessment year 2020-21 (Fin year 2019-20).on sale of house property. Can he buy a Flat costing Rs.60 lakhs and also invest the balance Rs. 25 lakhs in the designated Bonds (Rural Electrification Bond) and avoid capital Gain Tax. My specific question is - whether one can combine the option of buying a new Flat/House and also invest in the stipulated Bonds to avoid Capital Gains Tax ?
13 Replies
sabyasachi mukherjee
(27579 Points)
Replied 09 September 2019
refer Sec 54F
the provisions states:
1.owns more than one residential house other than the new asset.
2.purchases within a period of one year other than the new asset.
3constructs any residential house .
the provisions states:
1.owns more than one residential house other than the new asset.
2.purchases within a period of one year other than the new asset.
3constructs any residential house .
Madhavi Pandit
(78 Points)
Replied 09 September 2019
Yes.a tax payer can avail of the exemption under Section 54 and Section 54EC together
Kapadia Pravin
(17259 Points)
Replied 10 September 2019
@ vsraj
Surely you can take both benefits.
Under section 54 you can invest in purchase of flat and balance capital gain amount you can put in Capital Gain bonds under 54EC. (within 6 month from sale date of property) and (maximum amount 50 lakhs).
54F doesn't come into picture as it's not applicable at all
Surely you can take both benefits.
Under section 54 you can invest in purchase of flat and balance capital gain amount you can put in Capital Gain bonds under 54EC. (within 6 month from sale date of property) and (maximum amount 50 lakhs).
54F doesn't come into picture as it's not applicable at all
Ankit Agarwal
(2 Points)
Replied 10 September 2019
what is the CII for sale of property during FY 2019-2020
sabyasachi mukherjee
(27579 Points)
Replied 10 September 2019
@ Pravin you are wrong sec 54F IS ABSOLOUTELY OK.
READ SEC 54 F
READ SEC 54 F
vsraj
(administration)
(136 Points)
Replied 10 September 2019
Thank you All (Sirs/Madam) for the response to the query raised. I understand that the Capital Gain can be utilised for purchase of more than one Flat/House (ie 2) and also invest in the designated (govt approved) Deposits, to obviate paying Capital Gain Tax.
Also I believe that the Stamp duty/ Registration charges incurred and Broker,'s commission paid while purchasing the property can also be included in the cost of the property purchased..
thank you
vsraj
(administration)
(136 Points)
Replied 10 September 2019
As long as CII for 19-20 is not yet notified we have to proceed with the prev years CII, which at present is 280 (base 2001 is 100)
Kapadia Pravin
(17259 Points)
Replied 10 September 2019
@ sabyasachi
You please re-read the query and Section 54F.
I stand by what I posted.
please address your views to the querist. 🙏
You please re-read the query and Section 54F.
I stand by what I posted.
please address your views to the querist. 🙏
sabyasachi mukherjee
(27579 Points)
Replied 10 September 2019
Sec 54EC DOES NOT DEAL WITH THE QUERY REPLY.(ONLY RURAL ELECTRIFICATION BOND)SEC 54EC. SEC 54F IS ALSO REQUIRED.
I STAND BY WHAT I POSTED.
RE READ SEC 54EC, 54F
SALE OF HOUSE PROPERTY AND PURCHASE OF RESIDENTIAL HOUSE AND SECURITIES.
I STAND BY WHAT I POSTED.
RE READ SEC 54EC, 54F
SALE OF HOUSE PROPERTY AND PURCHASE OF RESIDENTIAL HOUSE AND SECURITIES.
Kapadia Pravin
(17259 Points)
Replied 11 September 2019
@ Madhavi @ vsraj
CII for 2019-2020 though not notified yet, but on an average it could be presumed to be 290 - 292.
CII for 2019-2020 though not notified yet, but on an average it could be presumed to be 290 - 292.
Suresh Thiyagarajan
(Student)
(3986 Points)
Replied 11 September 2019
1. Sale of house property and purchase of another house property will be covered u/s 54 exemption and the amount of investment in new house property can be claimed as an exemption.
2. In your case Rs. 60 lakhs can be invested in the new house and claim exemption u/s 54. And the balance Rs. 25 lakhs can be invested in REC bonds within 6 months from the date of sale.
3. As per Deepa S Bheda, Mumbai vs Department Of Income Tax (ITAT, Mumbai dated March 23, 2010) it is decided that once conditions specified under one section got satisfied there is no restriction why the two exemption provision can be utilized in the same year. Hence there is no restriction to claim sec 54 and sec 54EC exemptions in the same year provided conditions specified in the respective sections got satisfied.
4. With respect to CII it is yet to be notified by the CBDT and for a time being take an appropriate indexation number and arrive at your Capital Gains.
Please correct me if the above solution has an alternative view.
Recent Topics
- Asset Declaration in ITR2
- CGST/SGST Input tax Classification in Tally Prime
- PREFERENCE SHARES - NBFC
- Vivad se vishwas scheme 2024
- List of banks for tax payments available at e-Pay
- Excess itc claimed then intrest applicable even if
- Financing for Properties and Businesses
- TAX DEMAND STILL SHOWING ON INCOME TAX PORTAL, EVE
- FORM 10 IEA IN Revised return
- ITC Eligibility on GTA
Related Threads
CAclubindia
