Long term capital gains

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gopalsaran (Querist)

17 June 2014 sir i sold my residential plot on april 2013 for 12 lcks and got long term capital gains of rs 10 lcs in june2013 after 2 months i bought REC bond locked for three years @ 6% intrest. for whole capital gain amont rs10 lacs.so i want to kow is any tax i have to pay and what after 3 years when this rec bond will be released

Nikhil Kaushik

Nikhil Kaushik (Expert)

17 June 2014 1. in the assessment year 2014-15, no tax liability shall arise on account of this transaction on account of 54EC exemption

2. the interest earned every year shall be taxable under "income from other sources". Please note that REC wont deduct TDS on the interest payments. You will have to pay the tax on your own.

3. at the time of redemption, capital gains if any will depend on the difference between the redemption value and the indexed acquisition cost.

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)

17 June 2014 i disagree with point 3. no amount is taxable for the principle portion rec from 54EC bonds.

Nikhil Kaushik

Nikhil Kaushik (Expert)

17 June 2014 Dear Tushar,

I have already said if there is any difference. I understand that the redemption value will be same as the face value (generally). in such a case, you might actually be able to argue that it will give ltcl

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