An assessee has sold Building (Depreciable Asset) and has disclosed it under STCG. Exemption u/s 54EC is available on STCG calculated u/s. 50 on sale of depreciable assets held for more than 36 months. However, under Utility, there is no option of entering Exemption u/s 54EC. They have only 3 options for STCG on Sale of Depreciable Assets- Sec. 54D, 54G & 54GA. How can I claim exemption u/s 54EC?
7 Replies
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(177726 Points)
Replied 09 September 2019
Report the matter to helpdesk for any clarification.
As such it can be filed under LTCG section.
Kapadia Pravin
(17259 Points)
Replied 10 September 2019
Assessee has disclosed it under STCG and 54EC applies to LTCG.
Yash Morakhia
(107 Points)
Replied 10 September 2019
| Originally posted by : Kapadia Pravin | ||
 |
Assessee has disclosed it under STCG and 54EC applies to LTCG. |  |
54EC applies to Long Term "Capital Asset" and we are eligible to claim exemption u/s 54EC for depreciable asset. You can refer case law of Rajiv Shukla(Delhi High Court). The deeming fiction created by section 50 that the capital gain arising on transfer of a depreciable asset shall be treated as capital gain arising on transfer of short-term capital asset is only for the purpose of sections 48 and 49 and not for the purpose of any other section Section 54F being an independent section will not be bound by the provisions of section 50. The depreciable asset if held for more than 36 months shall be a long-term capital asset as per the provisions of section 2(29A).Therefore, the exemption under section 54F on transfer of depreciable asset held for more than 36 months cannot be denied on account of fiction created by section 50.
Yash Morakhia
(107 Points)
Replied 10 September 2019
| Originally posted by : Dhirajlal Rambhia | ||
|
Report the matter to helpdesk for any clarification. As such it can be filed under LTCG section. |
|
If we report it as LTCG, then chances are there that there will be scrutiny. Also, for LTCG, the tax rate is 20% & for STCG it will be 30%, so again big issue will be there. Can you provide some other solution?
Madhavi Pandit
(78 Points)
Replied 10 September 2019
| Originally posted by : Dhirajlal Rambhia | ||
|
Report the matter to helpdesk for any clarification. As such it can be filed under LTCG section. |
|
This is a genuine difficulty. If that building in sch DOA is filled, automatically the STCG on depreciable asset will appear SCH DCG and will be taxed accordingly unless less sale value is shown in the sale column of sch DOA. But I agree that will be risky.
Please share the resolution of the problem whenever it is resolved.
Suresh Thiyagarajan
(Student)
(3986 Points)
Replied 11 September 2019
1. This is a genuine difficulty with respect to the issue raised by you. Please do share the solution once it got rectified.
Kapadia Pravin
(17259 Points)
Replied 12 September 2019
Although there are judgements by 1 High court and 2 Tribunals . Department might have gone to SC. These judgements are old ones.
And subsequently , I think there was an amendment in definition section 2 - of short term capital asset . Mostly relating to the query only.
Otherwise, It's genuine difficulty to declare this in the ITR. And unless you show deduction under 54EC , you won't get it.
And subsequently , I think there was an amendment in definition section 2 - of short term capital asset . Mostly relating to the query only.
Otherwise, It's genuine difficulty to declare this in the ITR. And unless you show deduction under 54EC , you won't get it.
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