Dear All,
An individual assessee was a residential tenant (monthly rental of Rs. 50/-) at a chawl since 1994. Thus the COA of tenancy is NIL. The developer took the entire chawl premises for development in July 2010. The developer built a commercial premises on the land of said chawl. On 11th March 2013, he allotted permanent alternate accomodation to the assessee being shop of equal area. Thus, the allotment of commercial premises was done in exchange of residential tenanted premises. The agreement for permanent alternate accomodation was executed on 11th March 2013 and stamp duty of rs. 7600/- was paid by the assessee wherein in the agreement the market value determined for stamp purpose is only Rs. 149000/-. The assessee further paid Rs. 46,530/- towards development chrgs and Rs. 10,000/- towards cost of registration of society. Thus the total cost incurred by the assessee during FY 2012-13 is Rs. 64,130/- (7600+46530+10000).
Now the question is calculation of CG on 11th March 2013. In the agreement of acquisition of permanent alternate accomodation, the market value was mentioned at Rs. 149000/-. Further, in the alternate accomodation the builder has given commercial premises and not residential premises. Now exempted LTCG will be Rs. 1.49 Lakhs? (MV as per stamp duty is Rs. 1.49 Lakhs (-) COA in FY 1994 is Rs. 0/-) Though it is acquisition of commercial property, can LTCG of 1.49 Lakhs be claimed as exemption u/s 54?
Thereafter, the assessee sold the said commercial premises vide agreement dated 30th March 2013 for rs. 28.58 Lakhs. wherein stamp duty market value determined was Rs. 39.53 lakhs. Thus my actual book STCG will be Rs. 26.45 Lakhs (28.58 Lakhs - 1.49 - 0.64 Lakhs)? Since in stamp duty market value determined is Rs. 39.53 Lakhs, will my taxable STCG be Rs. 37.40 Lakhs ( 39.53 - 1.49 - 0.64)
Alternatively, now the assessee wants to reinvest Rs. 28.58 lakhs in another new residential premises. Presesntly he is owning only one residential house. He wants to claim exemption u/s 54 or 54F whichever is applicable.
Kindly let me know under which section he is entitled to claim exemption of LTCG ?? Whether 54 or 54F ??
Whether he should deposit full proceeds of Rs. 28.58 Lakhs with specified bank u/s 54EC of the Act to buy any other residential property at a later date ?? or whether he should deposit Rs. 39.53 Lakhs in banking account u/s 54EC on or before 31st july 2013 being final due date to file ITR for AY 2013-14 ?? Thus can he legally claim exemption under CG ?? Will he be entitled to re-invest the proceeds in next 2 years i.e on or before 30th March 2015 ??
Thanks !!!
Attn Mr. Parmar, I have modified my query (modifications are in bold+italics). Please reply again on the modified facts.
CAclubindia
