LTCG Captial Gain Account

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This discussion clarifies the rules for investing Long Term Capital Gains (LTCG) from selling residential land. It addresses whether funds parked in a capital gains account can be later invested in a 54EC bond for exemption if the initial property purchase deadline is missed. The conversation also covers the impact of COVID-19 extensions on investment timelines, particularly for transactions occurring in late 2019 and early 2020.

Siva

Siva (Querist)

18 April 2020 Dear CA Friends,
Assuming, I open a capital gain account to park the LTCGs out of a sale residential land and if I am not able to invest that in any house property within 3 years can I invest that into 54EC bond and claim exemption?

Thanks.

Uday

Uday (Expert)

19 April 2020 Exemption U/s 54EC can be claimed only if invested within 6 months from the date of transfer. As above transaction is not transfer, u cant claim

Siva

Siva (Querist)

19 April 2020 Thanks. For the LTCG during FY 2019-20 say transaction took place in Oct'20 can we invest till June'20. Since the dates are extended due to COVID-19 home the window is available.

Also earlier for transaction that has happened post Oct' till March had a librty to invest 50L prior to March and 50L after March such that within 6 months I get opportunity to cross the 50L limit. Is that still possible for transacation done in Oct'19 considering the COVID-19 situation.

CA ANILKUMAR B.COM FCA DISA

CA ANILKUMAR B.COM FCA DISA (Expert)

19 April 2020 As per the relief measures issued , where the time limit is expiring between 20th March 2020 to 29th June 2020 for various investments , extended to 30th June 2020. It includes investments for roll over benefits of capital gain also.

Siva

Siva (Querist)

19 April 2020 Thanks a lot friends for the clarification

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