Please Clarify if the assessee purchases the bonds u/s 54 EC to avail the benefit of exemption, then wether the same bonds can be given as security against Overdraft account or Loan obtained? whether O/D or loan can be obtained aginst the same? would it amount to trasfer and the capital gain exemption would be withdrawn?
specified asses u/sec.54EC converted into money or any loan/advances is taken of security of specified assets within 3 yrs from the date of acquisition , the amt of capital gain arising from the transfer of original assests which was not charged to tax, will be demmed income by way of long term capital gain in the p.y in which specified assets transferred.
Offering of specified assets as a security for any loan amounts to conversion of the specified assets into money.. the CG which was not charged to tax earlier will be deemed to be the CG for the current year
As per the provisions of sec.54EC, if the assessee offers the bonds as security or convert the same into money or laon within a period of 3 yeara from the date of acquisition, it will amount to transfer and capital gains tax shall be attracted.
Quoting the exact portion of sec 54ec relevant to the query-
Hope this would clear everything
Naveen Fintech Pvt Ltd
Kolkata
CA Inter
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Gupta Sachdeva & Co. Chartered Accountants
New Delhi
CA Final
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