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Fight b/w section 54F & 80C

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CA Sukriti Jain (Senior, EY) (1179 Points)
Replied 06 September 2015

I am sharing link of a PDF.. it mentions the case of - ACIT v. Shri C RAmabrahmam (2012)

https://www.kpmg.com/IN/en/services/Tax/FlashNews/Ramabrahmam.pdf

Tribunal held that as the provisions under which the deduction was claimed are altogether different, assesee can simultaneously claim deduction for the same amount under 2 different sections. EVEN IF it amounts to DOUBLE DEDUCTION

 

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CA Sukriti Jain (Senior, EY) (1179 Points)
Replied 06 September 2015

Also let us take an example different from th above query. (do not mix both)

 

Mr. A purchased a House property on loan. he repaid the installments in 10 years. with principal repayment each year being rs 1.5 lacs. Also paid interest amounting rs. 3 lacs. adequate deduction u/s 24b was also taken for interest paid.

 

Now in 10 th year, he sold the house property for rs. 32 lacs.

 

To compute the cap gains- 

Sale Consideration                                     32 lacs

(-)  COA (15 + 3)* Indexation benefit            20 lacs   (assume 20 lacs is the amount after indexation)

Hence Cap gains   =  12 lacs

 

 

So in this case assesee first took benefit of 15 lacs in 80C, then he took the benefit of same 15 lacs in the 10th year, in the form of deduction as COA.  same with interest amount.

 

This is whats normally done. So..is'int it also a DOUBLE BENEFIT..... which should not be allowed....... 


Kiran. S (CTO) (745 Points)
Replied 06 September 2015

That case is different I think. There was not application of funds .In our case it is application of funds which commonly used to gain double tax advantage.

When Corporates cry of double taxation then govt has to agree

When Corporates/indivuduals take advantage of double tax avoidance then ???

   


Kiran. S (CTO) (745 Points)
Replied 06 September 2015

In the same assesment year no advantage is taken.

The 15 lacs principal is taken over10 different assesment year. 

COA IS HIS BIRTH RIGHT TO TAKE to calculate  12 lac gains.

while in previous case  gains u/s 54E leads to tax liability being reduced.

These are two seperate issues I think.


manoj (student) (47 Points)
Replied 07 September 2015

Section 80C & 54F r different streams. and deduction under both can be claimed. refer the link.

 

https://www.itatonline.org/forum/index.php?topic=796.0




S. Shiroor (Others) (1207 Points)
Replied 07 September 2015

That is also opinion of the forum members. 


S. Shiroor (Others) (1207 Points)
Replied 07 September 2015

After giving a thought - I come to following conclusion which is obvious 

1) Selling price of LG asset consists of two parts (actually four) 

        a) cost price  b) the Gains Part

Only b)  gains part needs exemtion u/s 54F  and CP is obviously & natuarally not taxed

If at all a scrutiny comes up one can say the  Stamp Duty & Regd was funded from CP.  

Problem again will rise though if CP itself is far less than 1.5 lakhs the 80C

As long as scrutiny does not  come up it is OK. otherwise the AO are having big lenses in their eyes.

Thanks every1 for a good discussions

After  26 refunds out of 29 returns and My wife's  19 refunds out of 22 returns taught me something each time. 

 


Raahul (Management Accountant) (22 Points)
Replied 08 September 2015

Agreed with views of Mr. Shiroor..

Rashi Bajaj (CA) (752 Points)
Replied 08 September 2015

Benefit of both can be taken as under:

LTCG: Say Rs. 8,00,000

Less 54(F): Investment*LTCG/Sale consideration - (Considering entire SC invested): Rs. 8,00,000

Income from othe sources: Say 400000/-

Therefore, GTI=0+4L= 4Lakh

Less. Deduction for stamp duty and reg charges: 150000 max

NTTI: 4L-1.5L = 2.5L

Tax = NIL

 

Hope I am Clear


CA Sukriti Jain (Senior, EY) (1179 Points)
Replied 09 September 2015

Thanks all for this fruitful discussion. smiley




yatish (cpt student) (22 Points)
Replied 10 September 2015

what will be entry for when salary payable to an employee.

balakrishna (Self Employed) (58 Points)
Replied 17 September 2015

dear madam,

Entire amount Exempted Under sec 54 F 

Once the amount Exempted you Can not Claim Deduction 


Rashi Bajaj (CA) (752 Points)
Replied 17 September 2015

The exemption is for capital gains while the deduction is in respect to investment in property irrespective of the purpose of investment

Miss Rinkal (Student) (1304 Points)
Replied 24 September 2015

I agree with Rashi Bajaj



CA Sukriti Jain (Senior, EY) (1179 Points)
Replied 26 September 2015

Originally posted by : balakrishna
dear madam,

Entire amount Exempted Under sec 54 F 

Once the amount Exempted you Can not Claim Deduction 

 

In absence of any specific provision in the law, which restricts the same, we wl always go for the benefit of assessee.. & hence claim exemption & deduction  in both sections is possible. in my views.

 



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