Capital gain tax

This query is : Resolved

R.KANDASUBRAMANIAN (Querist)
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15 April 2012
A kalyana mandapam owned by an individual was sold in the year 2010-2011.

the entire sale consideration was invested in purchasing a new house.

how to claim exemption u/s 54f since depreciable asset is involved

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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15 April 2012 1. Section 50 is a Special Provision for computation of capital gains in case of depreciable assets and the resulting capital gain is treated is short term capital gain.
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2. The Gain is STCG but no where in Section 50 it has been mentioned that the asset will (always) be treated as Short Term Capital Asset.
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3. Section 54F is applicable with the Basic Condition of- Transfer of Long Term Capital Asset.
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4. In this section no where it has been mentioned that exemption is available for Long Term Capital Gains only. However, it can be appreciated from the section that deduction is available only in respect to the Capital Gains (of whatever type).
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5. For the purpose of availing exemption we
have to take care of both the Sections.
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6. So STCG of Point No 1 can be RENAMED AS
CAPITAL GAIN for the purpose of Section 54F.
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7. As you have invested entire sales consideration , you will avail 100% exemption.
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8.When investment in Residential House is less than the sales consideration amount
exemption will be calculated on proportionate basis on CAPITAL GAIN (STCG).
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