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Capital gain

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CA Babit Khurana

learning is my passion

338 Points Posted on 28 April 2013

Dear Professional Friends

My question is realtes section 54 of Income Tax Act,1961

someone sold a House Property of Rs 20 lac and indexed cost say Rs 7.5 lac and make a LTCG of Rs 12.5 lac.

Invest the amount in under constrution property and pay Rs 10 lac till know (Cost of New property say Rs 25 lac)

I want to clearify is it mandatory to make payment in upto of Rs 12.5 lac at the amount of LTC G before due date of filing of return i.e 31.7.2013 or it is enough to make an agreement to purchase for the property to claim exemption under section 54 of Income Tax Act,191

Its an urgent matter

Thanxx in advance

Replies (1)

rakshita

Ca final student

84 Points Posted on 29 April 2013

no its not mandatory to invest the total amount of LTCG in order to claim exemption under section 54.

in your query, out of the LTCG 12.5 u invested 10 thereby u can claim an exemption of 10 (the amount invested), and in order to claim exemption on the balance amount ie.2.5 , then either u invest this amount too or transfer this amount to capital gain deposit scheme before 6 months of transaction ( in which there was capital gain)

if u do not transfer this amount within 6 months, u'll not be able to cliam the exemption on the balance amount.