Income Tax

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Avinash Sharma (Querist)
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05 September 2009 A residential property owned by Mr. Gaurav is required by the Punjab Govt. on April 20, 2004 (Cost of Acquisition on 08.07.1981; Rs. 1,00,000). The govt awards Rs 20 lakh as initial compensation out of which Rs 5 lakh is received on March 10, 2007 and Rs, 20 lakh received on July 20,2007. On his appeal, the compensation of Rs. 8 lakh was paid to him on December 12, 2020. Mr Gaurav is a businessman and the date of filling Income Tax Return is October 31, every year. Ascertain the amount of investment and the time of investment for availing the maximum exemption under Section 54.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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07 September 2009 In case of compulsory acquistion -
No Capital Gain in Respect to AY 2005-06.

AY 2008-09:
Initial Compensation received Rs 5.00 Lac
Calculate index cost as if the asset has been transferred during the PY 2007-08.
500000-551000=-51000 Long Term Capital Loss to be c/fd to the next years.
AY 2009-10
LTCG 2000000-0=2000000
B/f LTCL -50000
Balance LTCG after set off =1950000
Which is required to be invested within the time frame given u/s 54 or section 54EC.
AY 2021-22 entire amt will be treated as LTCG. If cost is incurred for appeals etc. it may be deducted

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