Section 54G
This query is : Resolved
22 September 2008
Assessee shifted a industrial factory from Mumbai to a rural area.
Sold the assets of Mumbai factory and booked a capital gain of 10 lac in FY07. But took full exemption u/s 54G as he invested 20 lac for rural industrial factory. But in next two years say in FY09, he sold the rural factory also for 25 lac.
What will the taxable Capital in FY09 - will it be 15 lac or full 25 lac?
Sold the assets of Mumbai factory and booked a capital gain of 10 lac in FY07. But took full exemption u/s 54G as he invested 20 lac for rural industrial factory. But in next two years say in FY09, he sold the rural factory also for 25 lac.
What will the taxable Capital in FY09 - will it be 15 lac or full 25 lac?
22 September 2008
The cost of establishing the rural factory will be reduced by amount equallent to exemption already taken.
In your case The cost of rural industrial factory Rs 20 lacs will be reduced by Rs 10 Lacs (exemption already taken) thus capital gain would be Rs (25-10)= 15 Lacs.
In your case The cost of rural industrial factory Rs 20 lacs will be reduced by Rs 10 Lacs (exemption already taken) thus capital gain would be Rs (25-10)= 15 Lacs.
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