Siva (engineer) (74 Points)
13 July 2012I understand the Long Term Capital gain from selling house can be invsted in 54EC bonds within 6 months to avoid taxes. I also heard about a provision called Capital Gain Savings Account can be opened to explore the possiblity of investment like new house etc and can be parked there for 3 years. Assuming I park the money in the Capital Gain Savings account and after a year I don't find properrty can I be allowed to invest the amount in 54 EC bond and allowed to claim excemptio?.
Saurabh Maheshwari
(B.com,ACA)
(5923 Points)
Replied 13 July 2012
Investment in bonds u/s 54EC can be made to save tax on Long term cap gain arising on sale of any asset other than Res. House prop..... but the investment u/s 54EC is to be made within 6 months of sale ......so in your case if you have parked your funds in Cap Gain A/c Scheme,1988 for an year and thinking to route that money to 54EC bonds , then such routing is not permissible u/s 54EC ......Further the Amt parked in Cap Gain A/c scheme will become taxable if you are withdrawing them for any purpose other than for for investment in Res House prop u/s 54..
So its better to utilise that money for purchasing Res HP within 3 yrs of sale....
Thanks
Prakshal M. Shah
(CA & M.Com)
(69 Points)
Replied 13 July 2012
@ saurabh.
Condition for 54EC is transfer of any long term capital assets , so if residential property is long term capital assets dn i can invest in 54EC bonds.
pls clarify.
Prakshal M. Shah
(CA & M.Com)
(69 Points)
Replied 13 July 2012
@ saurabh
Condition for 54EC is only transfer of any LTC assets. so if residential property is LTCA dn i can invest in 54EC bonds.
Thx
Saurabh Maheshwari
(B.com,ACA)
(5923 Points)
Replied 13 July 2012
No, SEc 5EC exemption is not available for transfer of Res HP.
Prakshal M. Shah
(CA & M.Com)
(69 Points)
Replied 13 July 2012
@ Saurabh,
pls go through I T Act once. Sec. 54EC is not available only for deemed capital gain which take place on liquidation of company . sec. 54EC is available for LT Res. Property...
Thx
CAclubindia
