Capital Gain

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CA Sanjay Baheti

PROPRIETOR

639 Points Posted on 08 March 2010

My Client being an Individual having a resedential Plot taken on lease in Rajasthan since 1993. He has incurred total amount Rs.69003/- till 30.06.19999 towards cost of acqusition & Registration charges. Then He sold this Plot in Aug,2008 for a sale consideration of Rs.7,00,000/- through cash. Concurrently He purchased another Resedintial Plot in Ahmedabad on 16.10.2008. The Purchase consideration for the same is Rs.700,000/-

Now My question is whether he can claim long term capital gain to be exempt u/s 54 of I.T.Act as the entire capital gain is invested in another resedential Plot within the prescribed time.

Regards.

Sanjay Baheti

Replies (6)

Gita Iyer

Specialist

137 Points Posted on 08 March 2010

U will hav to compute the indexed cost of acquisition of the plot......and u can claim deduction of Rs. 700000/- from the net amt (i.e Sale consideration less indexed cost of acquisition) u/s 54 and the remaining LTCG if +ve, is taxable!!!

C.Balaji

Learner

2680 Points Posted on 08 March 2010

54 - Transfer of Res. house and Pur or construction of Res. house.........

In ur case.. considering Res. house is sold at normal value......I dont think - CG will arise since you have invested the entire Sale proceeds........

One thing Cost of Res. house sold is important....Sec 50 C will apply.....MV or sale consideration whichever is higher....