Applicability of capital gain
This query is : Resolved
17 February 2012
Sale of House property for Rs 96,00,000/-
Indexed Cost of Acquisition comes to Rs 36,32,797/-
Long Term Capital Gain:59,67,203/-
Assessee Purchased new House property for Rs 90,00,000/- out of which Rs 40,000,00 were financed by Bank and own funds invested by Assessee were Rs 50,000,00/-
Whether Long term Capital Gain should be paid on Rs 9,67,203 ( ie 59,67,203-50,00,000)?
Indexed Cost of Acquisition comes to Rs 36,32,797/-
Long Term Capital Gain:59,67,203/-
Assessee Purchased new House property for Rs 90,00,000/- out of which Rs 40,000,00 were financed by Bank and own funds invested by Assessee were Rs 50,000,00/-
Whether Long term Capital Gain should be paid on Rs 9,67,203 ( ie 59,67,203-50,00,000)?
17 February 2012
Section 54 of the income tax act stated that the capital gain from sale of long term property can be saved if someone buy long term residential property or construct residential property from the capital gain amount.
so property should be financed by capital gain amount to be eligible for exemption. not borrowed.
so property should be financed by capital gain amount to be eligible for exemption. not borrowed.
Message likes :
1 times
18 February 2012
Please see CIT Vs. Dr. P. S. Pasricha (Mum - HC) wherein the assessee sold a house and used the sale proceeds to buy commercial property. Subsequently (but within the specified period) he borrowed funds and purchased a new house. The AO denied deduction u/s 54 on the ground that the new house had been purchased out of borrowed funds and not out of the consideration received for the old house. On appeal, the Tribunal and High Court upheld the claim on the ground that s. 54 merely required the purchase of the new house to be within the specified period. The source of funds for the purchase was irrelevant.
Kerala High Court decision in K. C. Gopalan's case reported in 162 CTR 566 may also be relied on.
Kerala High Court decision in K. C. Gopalan's case reported in 162 CTR 566 may also be relied on.
Message likes :
1 times
18 February 2012
thank u sir for updating my knowledge
18 February 2012
Thanks alot sir!!!
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- TDS CREDIT MISMATCHING
- Buy back of shares u/s69
- Difference between Date of Payment and Date of Deduction?
- Unregistered suppliers utility
- Tax Audit Applicability – Newly Formed Partnership Firm with Profit Below 6%/8%
- GST Rate for Catering Services
- RCM @ 5% on Hamali charges, Transport Charges, Unloading charges we take ITC or not
- ITR 4 and Bank transactions
- FCRA 6 E- Intimation
- ADDITION OF CHALLAN IN TDS RETURN FORM 140
- CALCULATION OF DEFFERED TAX - OP BL IS DTL & CURRET IT DTA
- LLP audit under companies act
- Experienced CA recommendation from Kolkata for FNO return filing
- Interest Reporting in Form 168
- Sales of goods of amount Rs77 lakhs to a party
- Tax Demand of ₹4,650 for AY 2026-27
- Concept of Vendor and customner reconciliation
- Mistake in e-invoice identified after 24 hours
- EXPORT PAYMENT
- NRI ITR2 account in 2025-26.
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
