Long term capital gain

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Yogesh Sheth (Querist)
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09 June 2020 Respected Seniors,

I have purchased a plot of land on 10th July 2018 in joint name with my wife for Rs 12lacs , developed it and constructed shed on it for which we made an expenses of 14lacs. Now iam having a ready buyer for 35lacs who is ready to complete the deal within 15th July. My queries are:

I will be entitled for long term capital gain or not.

We both have contributed equally for all cost so what will be individual liability of tax.

Can I purchase 54ec bond to save my capital gain tax.

Awaiting an early solution to my query and thanks in advance.

Yours faithfully,

Yogesh Sheth

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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09 June 2020 Yes, it's long term capital gains.
Individual liability is Rs 90,000 tax indexing not considered.
You can purchase 54EC bonds.

Punit Gupta

Punit Gupta (Expert)
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09 June 2020 Asnwers to you query:
1. The gains arising out of this transaction shall be treated as Short Term Capital Gain, due to falling in the criteria as per the period of holding of the capital asset.
2. Property held in Joint name will allow the holders of the property to treat the gain individually, as per their share in the property and accordingly they can claim benefits under existing laws.
3. Benefits of exemptions under 54EC can be claimed against the Long Term Capital Gains only and thus the said transaction is not eligible to claim benefits under Sec 54EC.
Hope this clears your query.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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09 June 2020 Mr Punit Gupta property held more than 2 years is it not long term capital gain.

Punit Gupta

Punit Gupta (Expert)
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09 June 2020 **************Correction*****************
Misquoted the answers in my previous post and extend my apologies for the same.

1. Yes the gains are LTCG.
2. Individual Tax liability Rs.90,000/- (without indexation, computed only for the LTCG), total libility may very as per other inputs in computation.
3. Benefits under Sec 54EC can be claimed.

Punit Gupta

Punit Gupta (Expert)
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09 June 2020 Yes, Mr Seetharaman Sir, you are right.
Property held for more than 24 months, case of LTCG as per amendments effective from AY2018-19.
I had comprehended the same as purchasing on 10th July and selling the same on 15th July in the same year and so quoted my answer accordingly.
I already have posted another response, correcting my mistake.
Thank you for the guidance.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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09 June 2020 Welcome.................

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