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Capital gain excemption under 54EC for second applicant

Tax queries 514 views 3 replies

Madhav

Nobody

26 Points Posted on 27 December 2016

Hi,

Say a person x sells a property and from the amount received invests in NHAI (National Highway Authority of India) or REC bonds to save capital gains tax.

Can x be the second applicant in the tax saving bond ? In this case, the first applicant receives the interest and maturity amount of the bond.

Can x still claim the Capital gains excemption under section 54EC because he paid for the bonds (asuming ofcourse that the first applicant does not claim any deduction) ?

Thanks.

Replies (3)

CA VIRAL SANGHVI

Finance head

681 Points Posted on 28 December 2016

Hi,

Tax liability burden in case of joint holder is on first holder only

Madhav

Nobody

26 Points Posted on 28 December 2016

Hi,

Thanks for the prompt response, Tax liability meaning tax on interest earned in the bonds ?

Can the second applicant (joint holder) claim excemption from capital gains as the property sold belonged to the second applicant and not to the first, and the amount invested can be traced back to the second applicant only who received it from the property sale.

Thanks.