Long term capital gains

Dear friends,

I have got two queries :

A. Indexation benefit

Suppose I sell a long term capital asset.  Can I avail the option of paying long term capital gain tax @ 10% instead of 20% by not availing indexation benefit.

B. Exemption u/s 54F

Suppose I decide the invest the long term capital gain in purchasing a plot and then construct it within the stipulated period of three years.  For this I pay the price of the plot (which is more than the long term capital gain) to the developer and the residential plot is allotted in my name well within time.  However, the developer for one or the other reason, fails to hand over the physical possession of the residential plot to me within three years, despite the fact that about 95% payment towards cost of the plot has been made by me.  Since the construction has tobe completed within 3 years and as the fault is of builder as he did not hand over the possession in time, can i take this plea before Income Tax authorities and whether they would be extended the time limit of three years in my case?

pls answer accordingly and at the earliest

manish

Replies (2)

Yes, u can avail the option for paying tax @ 10% on long term capital gains

 

Regards,

Fatema

Rate of 10% can be availed of provided the asset transferred is a listed security or unit or a zero coupon bond.

The time limit of three years cannot be extended, but if you are able to prove all that you have said, then even if the builder doesn't hand over possession within that period, no LTCG will accrue to you.  There are case laws to that effect and I particularly remember one old decision of ITAT Chennai in this regard.

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