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Decuction u/s 54, for a belated return

25 December 2019

The assessed has sold house property in Jan 2019, can he claim deduction u/s 54, by investing in residence within 12 months, and files a belated return in feb 2020?

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4 Replies

CMA M.Keerthi chandra (C.A FINAL STUDENT AND QUALIFIED C.M.A) (561 Points)
Replied 25 December 2019

He may file the belated return in Feb 2020.

But the point is in order to claim benefit U/s 54 he should have appropriated the capital gain (either purchase or construction) before he files a return U/s 139 (even a belated return)

Such amount which is unappropriated must be deposited in a bank or institution (specified under scheme).But this should be done with time limit mentioned U/s 139(1).i.e 31st July or 30th September (If he is liable for Tax Audit) or such time limit as extended by Notification in this regard.

Such proof of deposit shall also be submitted along with I.T.R.

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Kapadia Pravin (17259 Points)
Replied 25 December 2019

You may not get deduction under 54 bcoz you did not comply with the condition of parking captial gain money in a specified CGS Account in a bank on or before due date of filing return that is 31st July 2019. (Extension of one month is not applicable for section 54 compliance.)

rama krishnan (12239 Points)
Replied 26 December 2019

Agree with Mr keerthi view

1 Like

Kapadia Pravin (17259 Points)
Replied 26 December 2019

Under section 54(2)...

The amount of capital gain which is not utilised by him for the purchase or construction of the new asset before the date of furnishing the return of income under section 139, shall be deposited by him before furnishing such return

[such deposit being made in any case not later than the due date applicable in the case of the assessee for furnishing the return of income under sub-section (1) of section 139]

in an account in any such bank as specified ( capital gain account scheme) and utilised in accordance with CGAS scheme and such return shall be accompanied by proof of such deposit

Under the above provision, you may not be allowed deduction under section 54