IF AN ASSESSEE SOLD AGRICULTURE LAND FOR 1 CRORE WHERE CAPITAL GAIN IS 60 LAKH
FOR 54B EXEMPTION HE MADE AN AGREEMENT ON 100 RUPEES STAMP TO BUY ANOTHER AGRICULTURE LAND FOR RS. 1.40 CRORE AND PAID AN ADVANCE OF RUPEES 40 LAKH BUT AFTER 4 NOTICES RECEIVED FOR NON PAYMENT OF BALANCE AMOUNT 40 LAKH IS FORFEITED
CAN HE CLAIM EXEMPTION OF 40 LAKH U/S 54B
OR IS THERE ANY OTHER WAY TO SAVE CAPITAL GAIN
1) Amount Forfeited by the seller (i.e, Rs 40 lakhs) is a dead loss for you and you are not eligible to claim deduction u/s 54B for such amount.
2) Your are still liable to pay tax on capital gain of Rs60 lakhs.
Planning:
1)deposit Rs60 lakhs in Capital Gain deposit account before the due date of filing ITR u/s 139(1) or
2) purchase another land
if you are going to purchase another agriculture land than purchase such land in a rural area because capital gain is exempted on rural agriculture land
Gupta Sachdeva & Co. Chartered Accountants
New Delhi
CA Final
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