Ltcg
This query is : Resolved
11 September 2012
If I Convert an agricultural land (inherited from my grandfather) to NA plots and sale the same and then invest the amount from the sale of plots in to residential property which is under construction will i be able to get the LTCG benefit under section 54?
11 September 2012
Dear PAnkaj,
U can claim exemption under section 54 F because it merely says that capital gain from sale of any capital asset can be used for construction of residential property. but the balance amount not utilized should be deposited in Capital Gains deposit accounts scheme before filing ITR or 30th september whichever is earlier.
U can claim exemption under section 54 F because it merely says that capital gain from sale of any capital asset can be used for construction of residential property. but the balance amount not utilized should be deposited in Capital Gains deposit accounts scheme before filing ITR or 30th september whichever is earlier.
11 September 2012
Exemption will be available u/s 54F if the sale proceeds are invested in a residential house.
11 September 2012
Dear CA Ilayaraja, exemption in this case will be available u/s 54F and NOT u/s 54.
Exemption u/s 54 is available when a residential house property has been sold.
Exemption u/s 54 is available when a residential house property has been sold.
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11 September 2012
Sorry for the mistake. Actually i intended to put 54f. Thank you Mr. Sidhartha Bhardwaj.
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11 September 2012
Dear CA Ilayaraja / CA Siddhartha, "sale of any capital asset",as u said. I am confused that the land was an agricultural land which i converted to NA and i purchased a residential property. But someone was telling me that if i sale agricultural land then i would get ltcg exemption only if i invest the amount into purchase of agricultural land and not residential property. kindly provide your opinion.
11 September 2012
There are 2 sections - Section 54B and Section 54F.
Section 54B is applicable when an agricultural land is sold and the amount is invested in another agricultural land.
Section 54F is applicable when ANY CAPITAL ASSET other than a residential house is sold and the amount is invested in a residential house.
In your case you have converted the agricultural land into non-agricultural land. So it is no more an agricultural land.
Even if it was an agricultural land you are eligible for exemption u/s 54F.
Section 54B is applicable when an agricultural land is sold and the amount is invested in another agricultural land.
Section 54F is applicable when ANY CAPITAL ASSET other than a residential house is sold and the amount is invested in a residential house.
In your case you have converted the agricultural land into non-agricultural land. So it is no more an agricultural land.
Even if it was an agricultural land you are eligible for exemption u/s 54F.
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11 September 2012
What i mean to ask is that,after converting the agricultural land in to non agricultural land will i get the exemption u/s 54F?
11 September 2012
Yes you will get the exemption. As said above exemption u/s 54F is available if ANY CAPITAL ASSET other than a residential house has been sold.
Your non-agricultural land falls within ANY CAPITAL ASSET.
Your non-agricultural land falls within ANY CAPITAL ASSET.
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11 September 2012
agreed with bhardwaj.:)
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