Capital gain u/s 54

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pradeep vindurani (Querist)
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25 June 2013 X Purchased house on 01-06-1990 for Rs.20.00 lacs ,X died on 15-09-2005, property transferred to legal heir Y, who sold the property for Rs. 40 lacs(whereas circle rate was 50 lacs), then Y purchased house property for 50 lacs took housing loans of Rs. 30 lacs. plz reply on three issues (1)year of CII for Y (2)Taxable value for Y 40 or 50 lacs(3)deduction to be claimed irrespective of housing loans, and whether amount of sale can be invested anywhere else. thank u

CMA Nishad Patkar

CMA Nishad Patkar (Expert)
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26 June 2013 1. As per the Section 49(1) CII for the year in which asset was first held by the assessee, i.e. 05-06. However, the Bombay High Court in the case of CIT vs Manjula J. Shah [2012] 204 Taxman 691 has receltly held that indexed cost of acquisition has to be computed with reference to the year in which the previous owner first held the asset and not the year in which the assessee became owner of asset. Hence as per this direction CII for the year is 90-91. Hence in this case I advice you to take an opinion from your Tax Consultant before finalizing CII.

2. Please take value adopted for Stamp Duty.

3. in case of Housing Property you can take deduction U/S 54 by investing in new property provided fulfillment of conditions of the section. Alternatively you can invest in Bonds of NAHI or REC as per section 54EC, However please considered the interest rates offer by these bonds, as they are relatively lower than usual market bonds.

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