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Capital gain

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ANOOP

student

223 Points Posted on 02 April 2013

I need this query to be solved,

I HAD PURCHASED A LAND IN 2000 FOR RS 1 LAKH NOW IN 2013 I AM SELLING THE SAME LAND IN 20 LACS, AND WITH 20 LACS, 10L I WILL INVEST IN PURCHASE OF ANOTHER LAND AND ANOTHER 10L I WILL INVEST TO CONSTRUCT MY OLD HOUSE...SO MY QUERY IS DO I HAVE TO PAY TAX ON CAPITAL GAIN OR I WILL GET EXEMPTION UNDER SECTION 54.

Replies (6)

Khushbu Jaiswal

CA Finalist

276 Points Posted on 02 April 2013

In my opinion others are right you will not get exemption U/S 54 as the same is available for residential house but not for residential land.

sorry for my mistake

Sumit Grover

Chartered Accountant

2575 Points Posted on 02 April 2013

No, u cannot claim under section 54... .... Since, the land sold is not the residential house property.

Sumit Grover

Chartered Accountant

2575 Points Posted on 02 April 2013

Moreover, section 54F is also not allowed, since the asset in vch the investment is to be made is only the land... And not the residential house property(or the proposed residential house property to be constructed on such land)

ANOOP

student

223 Points Posted on 02 April 2013

yes it is a residential land which I am selling

Mihir

Wealth Manager

5358 Points Posted on 03 April 2013

First compute what is the capital gain.

Sale consideration = Rs. 20,00,000

Less: Indexed cost of acquisition = Rs. 100,000 x 852/406 = 209,852

Capital gain = Rs. 20,00,000 - 209,852 = 17,90,148

Capital gain tax = Rs. 368,770

You are required to invest Rs. 17,90,148 to save capital gain tax.

Sumit Grover

Chartered Accountant

2575 Points Posted on 03 April 2013

In my opinion, no exemption shall be allowed u/s 54...since, the expression used in section 54 is "and being a residential house". It doesnt include just a land.