As per the Budget 2014-15, there have been amendments in sec 54, 54F. I have read thru the IT Act and Interim Budget but still need a second opinion. Request the help from the forum and the expert here on the below transaction.
Assessee (My mother) is a woman with a residential house since 1998. In Apr 2005 she she buys a gala in an industrial unit for 13 lacs. In Dec 2013, she sells it for 40 lacs. The indexed cost works to 24 lacs and LTCG of approx 16 lacs. She purchases an industrial unit in March 2014 for 31 lacs.
However as she was misguided by a CA, the LTCG is not exempt as capital asset purchased was an indutsrial unit and not a residential unit.
What would be the best way to save the LTCG? She has only one week left to file her returns. She has elapsed the time to invest in NHAI/REC bonds as its over 6 months. She also owns one residential house an on today and hence the amendments in the budget 2014-15 will not impact her. Also the same amendments are applicable from 1 April 2015 viz. AY2016-17.
One advise given is to deposit the money in Capital Gain Saving Scheme (FD with a Bank) before 31st July. File the returns. Then invest the proceeds before Dec 2016 into a residential Unit. However there is a confusion whether amount to be deposited is net Sales value of 40 lacs or only Capital Gain of 16 lacs. She only owns one residential house so she can invest in anoother one. Can some please confirm this transaction.
Second advise given is to invest only the capital gain of bonds in REC/NHAI. Te justification for elapse of 6 months would be the delayed receipt of payment from the Bank from which the purchaser took a loan and paid the assessee.
I await to hear what experts have to say in this matter?
CAclubindia
