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Sec 54 EC

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Prakash (Querist)
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06 January 2011 A sold property during December 2010 for a sum of Rs 1.15 crore resulting in a long term capital gain of Rs 1 crore. He has invested a sum of Rs 50 lakhs in eligible Bonds during December 2010 (Financial year 2010-11) and plans to invest the balance Rs 50 lakhs during April 2011(Financial year 2011-12). Will he be eligible to claim the entire Rs 1 crore as exemption for the Assessment year 2011-12 u/s 54EC as the restriction for investment of Rs 50 lakhs is per financial year and not assessment year.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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06 January 2011 One crore is possible as per https://www.simpletaxindia.org/2009/03/sec-54-ec-bonds-1-crore-capital-gain.html

But I feel that if the assessee prefers to do so by availing the celing of Rs. 1 crore by investing Rs. 50/- lakhs each in two financial years,it would mean that the law gives an additional benefit for those who postpone the transaction to the last quarter of the financial year thereby creating an adventurous situation inviting the risk of rejection by the income tax department.

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