Claiming long term capital gains tax exemptn u/s 54ec + 54f

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Kapil Tiwari (Querist)
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24 February 2013 A vacant plot of land was sold for a net sale consideration of Rs.1,10,36,000/-. The fair market value, after indexation, of the land, as on 01/04/1981, was Rs.19,39,091/-. Hence, Long Term Capital Gain was Rs.90,96,909/-.

The following are the investments made for claiming tax exemption:

1)Rs.50,00,000 in NHAI plus REC bonds for exemption u/s 54EC,

2)Rs.35,00,000 in a residential property for exemption u/s 54F.

Please advise:

a)computation of the total tax exemptions that can be availed,

b)total Long Term Capital Gains Tax payable after considering the exemptions.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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24 February 2013 1. First Compute Exemption U/s 54F:

9096909x(3500000/11036000)=2885029

2. Exemption U/s 54EC =5000000

3. Total Exempt Capital gain =7885029

4. Taxable capital Gain = 9096909-7885029
= 1211880.

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Kapil Tiwari

Kapil Tiwari (Querist)
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25 February 2013 Thanks Mr. Paras Bafna. Hence, the tax payable on Rs. 1211880 is Rs.249647 including 20% tax and 3% cess there-on. Is my computation correct?

With kind regards, Kapil Tiwari

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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25 February 2013 You must consider Income under other heads also. In case of having no other income or Total Income excluding capital gains is less than the basic slab limit, the Gap or shortfall may be advantageous.
.

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Kapil Tiwari

Kapil Tiwari (Querist)
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25 February 2013 Mr.Paras Bafna, you have explained very clearly! Many thanks to you, Sir!

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