Long term capital gain on assets acquired under complusory a

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shalini gupta (Querist)
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15 June 2012 can deduction under 80c is allowable against long term capital gain on land under compulsory acquisition by govt.
and also tell me how to calculate tax if there is normal income, LTCG, & agriculture income

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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15 June 2012 Against LTCG 80C is not allowable.
.
Example -1

Normal Income : 185000
LTCG : 50000
Gross Total Income : 235000
Deduction U/s 80C : 25000
(Allowable from Normal Income)
Total Income: 210000
.
Tax at Normal Rate on 180000 NIL
Tax on Special Rate on 30000 6000
.
Since in the above Example Normal Rate Income is Below 180000, Agriculture Income
is not required to be added for rate purpose. It will be tax free as such.
.
Example -2

Normal Income : 185000
LTCG : 50000
Gross Total Income : 235000
Deduction U/s 80C : 4000
(Allowable from Normal Income)
Total Income: 231000
.
Tax at Normal Rate on 181000 100
Tax on Special Rate on 50000 10000
.
Since in the above Example Normal Rate Income is above 180000, Agriculture Income
is required to be added for rate purpose.
.
We have to revise the calculation in the following manner if Agriculture Income is to be said as :700000
.
1. Tax on Income for Rate Purpose
Income (181000+700000)= 881000
Tax on 881000= 115300
2. Less: Tax Rebate on Agriculture Income
(180000(Slab)+700000)=880000
Tax on 880000=115000
A. Net Tax Payable at Normal Rate(1-2) :115300-115000= 300
B.Tax on Special Rate on 50000 10000
.
Total Tax Payable 10000+300=10300.
.

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