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Section 54

Nilesh Koparde (Hardwork is a key of Success...) (678 Points)

10 December 2012

Explain me section 54

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2 Replies

Sanket (!..Live to Give..!) (16427 Points)
Replied 10 December 2012

1. Section benefit can be availed only by Individual and HuF assessee

2. Sale should be of long term residential building or lands appurtenant thereto

3. Income of house property should be chargeable under the head of "income from house property"

4. Capital gain arising from sale of above said property will be saved up to the amount used in to

-- purchase a residential house within year before the date of transfer of old house or within two year after the date of transfer of old house.or

-- construct a house with in three year from date of transfer of old house property.

5. Capital gain is saved up to the amount which is used in to buy /construct new house,if amount used for house purchased/construction is less than the amount of capital gain than the balance amount will be taxed as long term capital gain.

6. If the new house will be sold within three year from the date of purchase or construction as the case may be than while calculating capital gain of the cost of new house will considered as under.

-- If cost of new house is less than the capital gain arising from old house:cost of new house will be nil.

-- If the cost of new house is more than the capital gain arising from old house :cost of new house will be :total cost of purchase/construction minus capital gain on sale of old asset .

7. If amount of capital gain arising from the sale of old asset is not used as per point 4 before the due date of furnishing of income tax return or furnishing of return which ever is earlier than the balance unused amount should be deposited in designated banks under capital gain account scheme 1988 .

8. If capital gain amount unused has not been deposited under the scheme as per sr no 7 than the amount of capital gain will be taxable in the previous year as long term capital gain it self no matter it is actually used by the assessee for the purpose of sr no 4

9. If the amount deposited in capital gain scheme as per sr no 7 wholly or partly has not been used with in the three year from the date of transfer of old asset and purpose given under sr no 4 than the unused amount will be taxable in the hand of the assessee in the previous year in which three years expires from date of transfer of old asset as long term capital gain.