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Section 54 - Urgent, Please Reply.

MManjula (Home Maker) (68 Points)

16 February 2012

For SALE OF PLOT (RESIDENTIAL) >>>

PLOT (Residential)	PURCHASE Info	SALE Info
Sale Deed (Stamp Duty) Value >>	2.50 Lacs	2.50 Lacs
Sale Agreement Value >>	13.5 Lacs	No Agreement
Amount Paid for Purchase >>	13.5 Lacs By Cheque
Amount Received for Sale >>		11 Lacs By Cheque & 2 Lacs By Cash
Transaction Date >>	01-Feb-09	15-Feb-12
CII of Financial Year >>	582	785

My Queries >>>
1)) For calculating Indexed Cost of Acqusition What is the Base at the Time of Purchase? Sale Agreement Value OR Sale Deed Value?
2)) For Amount Received, Can I invest Capital Gains in Capital Gains Exemption Bonds of NABARD, NHAI or REC as Per Section 54EC? 3)) Extra Amount Received apart from Registered Amount 2.5 Lacs is treated as Income from Other Sources OR Capital Gains?

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4 Replies

Dhanabal Ramasamy (CHARTERED ACCOUNTANT) (105 Points)
Replied 20 February 2012

Madam,

Indexation always done on the Registered sale deed value ie 2.5 lacs in your case.

Extra amount you received cannot shown as gain because you taking it as unaccounted so how can you legalise the black money.

Since registered sales value is equal to purchase value so there wont be any capital gain and if you index the cost then you ll have capital loss

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Dhanabal Ramasamy (CHARTERED ACCOUNTANT) (105 Points)
Replied 20 February 2012

Madam,

Indexation always done on the Registered sale deed value ie 2.5 lacs in your case.

Extra amount you received cannot shown as gain because you taking it as unaccounted so how can you legalise the black money.

Since registered sales value is equal to purchase value so there wont be any capital gain and if you index the cost then you ll have capital loss

kanagaraj (CHARTERED ACCOUNTANT) (793 Points)
Replied 20 February 2012

I don't understand the position. Since, your purchase value as per stamp duty is only 2.5 lacs, then how could you paid through cheques. At present NABARD are not eleigible for capital gains exemption.Kindly get advice from CA with your documents.

PRADEEP REDDY (CHARTERED ACCOUNTANT) (664 Points)
Replied 01 March 2012

Hi Manjula,

1.As long as there is sale deed for your purchase of residential plot (i.e for RS.13.5 lacs ) and vendor has paid income tax based on RS.13.5 lacs you can consider RS.13.5 lacs for indexation .

2.since the sale consideration received(Rs.13 lacs) is less than cost of acqusition(13.5Lacs) there is no capital gain.In order prove the genuinity of sale transaction in feb 2012 there should be a sale deed for sale of plot

3.Amount received in excess of registered value (i.e 13minus2.5 lacs =10.5 lacs)is considered as income under the capital gain.But in your case cost acqusition is less than sale consideration so capital gain doest not arise.

Comments are invited.