Capital gain exemption

Dear Sir,

On of my client sold residential Flat in Oct. 2014 earning LTCG Rs. 7 Lakhs & he also sold a Plot in Feb. 2015 earning LTCG rs. 11.50 Lakhs (Sale Consideration Rs. 15 Lakhs). Out of all the above receipt he has purchased a Non Agri. Plot Rs. 5 Lakhs on 30/03/2015 & Paid by A/c Payee Chq. which was cleared on 03/04/2015. he wants to construct a residential house on above plot (Const. Cost. Approx. 20 Lakhs). How much Minimum amount he has to deposit in capital gain a/c scheme so that Tax on capital gain doesn't arise? & whether constructing single house he can claim deduction under both section 54 & 54F.

Replies (1)

For claiming exemption u/s 54 , LTCG has to be invested and for claiming exemption u/s 54F Net consideration is to be invested.

So total requisite amount of investment is 7 L [S.54] + 15 L ;S.54F] =22 L

Out of which 5 L has already been spent so you need to invest 17L more which is well within 20L budget.

Exemption under S. 54 & 54F is available simultaneously, you can safely go with it. There are many many cases wherein investment is allowed simultaneously. Even exemption u/s 54EC is also possible.

 

BB Sarkar v. CIT 132 ITR 150 (Cal)(1981)

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