Value u/s. 50c and invt. for claim u/s. 54f

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

08 April 2012 Sir,
A has sold a NA land for consideration of Rs. 651000/- on 24.022011,total amount received on same date. Govt. value is at Rs. 2135000/- u/s. 50C.
Land acq. cost on 03.06.1988 is 42,000/-.
A is partner in firm having audit as such due dt. u/s. 139(1) is 30-09-2011.
Net income other than capital gain from above transaction is at Rs.433500/- considering deduction u/s. 80C.
Assessee has invested the amount as under for construction of house property -
24.02.2010 to 31.03.2010 -Rs. 131755
01.04.2010 to 31.03.2011 -Rs.1127145
01.04.2011 to 30.09.2011 -Rs. 132276
Under the circumstances,
1. whether the investment made in house, more than the actual sale price will qualify for exemption u/s. 54F?
2. Whether diff. amount will be treated as gift in hands of purchaser?
3. Kindly give calculation of Tax for LTCG.

Expect views from experts at earliest, Thanks.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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08 April 2012
3. Calculation for LTCG in case of A:
Sales consideration 21,35,000/-(S. 50C)
Indexed cost of Acqn 42000x711/161
= 185478

LTCG=19,49,522

2. Difference amount means 2135000-651000
It will not be treated as Gift as the immovable property has been sold for a consideration.
Section 56(2)(vii)(b) would be applicable only when the property has been sold for
"Without Consideration".
.
Further, on the concession or difference, the department is getting revenue from the seller.
.
1. In my view, amount spent prior to transfer of land will not qualify for deduction U/s 54F as it seems to be the
case of Construction of House and not of the purchase of a house. In such a case amount to be considered as invested in Residential house will be the amount spent after 24.02.2011.
.

Querist : Anonymous

Querist : Anonymous (Querist)

09 April 2012 Thanks,
Kindly advice on the point whether amount spend more than the actual sale price of RS. 651000/- will qualify for exemption u/s. 54F?
Whether sect.50C over rides sect 54F(1)(a) as the investment in new asset is more than actual consideration received.

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