Surrender of LTCG under section 54F

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Querist : Anonymous

Querist : Anonymous (Querist)

09 September 2010 Dear Experts,

I claimed exemption under section 54F in return filed in June 2009 for a residential unit purchased in May 2008. I sold it due to personal reasons in July 2010 i.e before 3 years. I understand that I will have to surrender the LTCG exemption that I claimed.

Please advise when do I have to pay the claimed exemption? Do I have to pay in march 2011 or before? Please advise

SANJAY TALATI

SANJAY TALATI (Expert)

09 September 2010 The Exemption of LTCG in respect of the sale of residential unit is u/s 54 and not u/s 54F.

Any way, as u have sold the newly purchased residential house property before the expiry of 3 years, and therefore, the exemption allowwed earlier would be taxable. Hence, the capital gain which arises on the transfer of the house would be computed as under :

Sale Consideration
Less : Cost of Acquisition
of the Trfd. house as reduced by the
the exeption granted earlier.

This is the STCG of the previous yer of sale and u have to show in the IT return of the year of sale of house and plan to deposit the tax accordingly.

Querist : Anonymous

Querist : Anonymous (Querist)

09 September 2010 Thanks Mr Sanjay.

Pls specify if the tax to be surrenderred can be deposited in march 2011 or do I have to deposit in advance tax form i.e in sep / dec and Mar in installments.

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