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.
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
yes it is a residential land which I am selling
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.
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.
CAclubindia
