capital gain

This query is : Resolved

Rajesh agarwal (Querist)
Follow

02 June 2011 my client acquired a house property in 1978 for Rs.20 lacs and sold it in 2010 for Rs.4.50 crores.Stamp duty was paid on Rs.6.50 crores under section 50C.Indexed cost of the property is Rs.60 lacs at the time of sale.capital gain as per income tax act is Rs.5.90 crores whereas actual sale consideration received is only Rs.4.50 crores.my client want to save entire capital gain tax by investing in another house property under section 54.How much amount will he have to invest?If he invests only actual sale consideration, what will be the position under the income tax act?

CA MANOJ GUPTA

CA MANOJ GUPTA (Expert)
Follow

02 June 2011 FOR CLAIMING EXEMPTION UNDER SECTION 54 U CAN INVEST ANY AMOUNT IN THE NEW HOUSE BUT CG WILL BE EXEMPT TO THE EXTENT OF COST OF NEW HOUSE
IN THE CASE OF GOULI MAHADEVAPPA THE BANGALORE TRIB HAS OBSERVED THAT The Legislature consciously intended to apply the fiction under section 50C only to the expression used in section 48 and not in any other place. The “Capital gains” and the “net consideration” have to be worked out within the framework of section 54F, without imposing any fiction created by any other section. Thus, the capital gains arising from the transfer of any long-term capital asset for the purpose of section 54F has to be worked out applying section 48 without imposing section 50C into it.
GOING BY THE CASE U WILL HAVE TO COMPUTE CG BY TAKING 4.5 CRORE AS SALE VALUE AND DEDUCTING THEREFROM INDEXED COST TO ARRIVE AT CG IT IS THIS CG UPTO WHICH EXEMPTION WILL BE ALLOWED EVEN IF U INVEST MORE BEACUSE COMPUTATION UNDER SECTION 50C IS DEEMED AND NOT ACTUAL

CA MANOJ GUPTA
JODHPUR
09828510543

Message likes : 1 times

Rajesh agarwal

Rajesh agarwal (Querist)
Follow

03 June 2011 thanks for your reply

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

Join the CA Students WhatsApp Community for ICAI Updates, Trending Courses & Notes!

Similar Resolved Queries

Unanswered Queries

Popular
Recent

Trending Online Classes

Direct Tax Laws & International Taxation May 26,Sept 26 & Jan 27

CA Arvind Tuli

Enroll Now
Audit Fast Track Recorded Batch For May 26,Sept 26 & Jan 27

CA Aarti Lahoti

Enroll Now
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English

CA Bhanwar Borana & CA Shubham Keswani

Enroll Now

view all classess

Meet our CAclubindia PRO Members

Vinod Selv

AKCJ INFO

JAYDEEP MITRA

Richa Bajoria

Arun Borad

Subscribe Now

capital gain

Similar Resolved Queries

Trending Online Classes

Meet our CAclubindia PRO Members

Quick Links

Browse by Category

Latest Job Openings

Senior Executive

Manager- Finance and Compliance

GST CONSULTANT

GST CONSULTANCY

Accountant

CA Final

Article Assistant

Associate CA