Combined benefit of sec 54f and sec 54ec

For availing Benefit u/s 54EC, you need to invest in bonds issued by NHAi etc. and for Sec. 54F, u need to invest in residential house property (other conditions also to be satisfied)...

For availing Benefit u/s 54EC, you need to invest in bonds issued by NHAi etc. and for Sec. 54F, u need to invest in residential house property (other conditions also to be satisfied)...

Max. limit for 54EC is 50.00 lac. 

You can take exemption of both. 

In case of a salaried employee, if he has only one residential flat which is let out, can the loss on that let out property be incorporated in Form16 being issued by the employer? Say for example,

- Total annual salary of the employee is Rs. 10 lakhs

- He has one flat which he has purchased by taking loan and paying interest to the bank to the tune of Rs.5 lakhs every year.

- His loss from let out house property is Rs.3 lakhs after adjusting for rent.

Q1. Is it allowed to incorporate this loss of Rs.3 lakhs in form 16 to be issued by the employer?

Q2. If it is not allowed to report it under form 16, then does it need to be incorporated in the return and TDS to be claimed?

Kindly guide....thanks

Originally posted by : ASHISH SHAH
	Whether combined benefit of Sec 54F and Sec 54EC be availed.. i have sold a long term capital asset..so can i claim exemption in both the Sec 54F and 54EC together?

Yes it is certainly possible.

For claiming Section 54EC, you have to invest the amount of capital gain, within 6 months from the date of transfer.

The limit for investment is 50Lakhs in each financial year.

If the assessee has transferred the capital asset in October or later, there is room to invest 50lakhs in 2011-12 and 50Lakhs in 2012-13, thus making the total benefit u/s 54EC 1 Crore.

But you have to invest Net consideration to claim section 54F.

This means the amount of exemption you can claim will be restricted to:

LTCG x (Balance net consideration after making 54EC investment)

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Net consideration.

This means there will be some taxable LTCG after claiming simultaneous benefit of both these sections.

I suggest to evaluate the best possible fund utilisation which will give the client maximum return on his funds, rather than just look at tax saving angle.

Originally posted by : AK
	In case of a salaried employee, if he has only one residential flat which is let out, can the loss on that let out property be incorporated in Form16 being issued by the employer? Say for example, - Total annual salary of the employee is10 lakhs - He has one flat which he has purchased by taking loan and paying interest to the bank to the tune of 5 lakhs every year. - His loss from let out house property is 3 lakhs after adjusting for rent. Q1. Is it allowed to incorporate this loss of 3 lakhs in form 16 to be issued by the employer? Q2. If it is not allowed to report it under form 16, then does it need to be incorporated in the return and TDS to be claimed? Kindly guide....thanks

Hi

Employer shall take into account the loss from house property,

both at the time of deducting TDS, and at the time of giving the Form 16.

You may refer to section 192(2B) of the Income Tax act.

Employee may give a simple letter to the effect informing the employer of the income heads other than salary.

Employer shall consider all the other incomes, but loss only from house property shall be considered by employer.

Employer shall then deduct TDS based on the income thus computed.

TDS should be deducted at an average rate from every month's salary, i.e.,

if the tax liability computed (incl Edu cess) is suppose Rs.12,000/-, then the monthly deduction shall be 12000/12 = 1000 every month.

sir 

this question is very important   it has not been answered  . Can we apply both section 54f and sec 54ec simultaneously?

i sell a property( long standing non residential -Long term capital gain  ) for 50 lakhs,  net consideration is 45 lakhs, capital gain is 40 lakhs (calculated after indexation) . then i bought a flat of 20 lakhs and nhai bond of 20 lakhs    --  hence i pay no tax   is that true?

NO according to some --  you can either avail bond or buy new house/flat   BUT you cannot cannot avail both benefits at the same sitting  

 which interpretation is correct ?

i hope it is the former!

The recent decision of Mumbai ITAT in the case of ACIT vs Deepak S Bheda reiterates the view that combined deuctions u/s 54F and 54EC can be claimed 

Originally posted by : azad
	sir  this question is very important   it has not been answered  . Can we apply both section 54f and sec 54ec simultaneously? i sell a property( long standing non residential -Long term capital gain  ) for 50 lakhs,  net consideration is 45 lakhs, capital gain is 40 lakhs (calculated after indexation) . then i bought a flat of 20 lakhs and nhai bond of 20 lakhs    --  hence i pay no tax   is that true? NO according to some --  you can either avail bond or buy new house/flat   BUT you cannot cannot avail both benefits at the same sitting    which interpretation is correct ? i hope it is the former!

azad

you have to still pay tax on C.G. of rs. 222222 as per your interpretation you should either invest rs. 2.5 lakh in residencial property our purchase bond of rs. 222222 more to save tax and have no tax