Capital gain - some questions

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Mihir

Wealth Manager

5358 Points Posted on 26 August 2011

Q1. If a capital asset such as a residential house is acquired after a long legal suit, can the assessee avail the expenses incurred for the lawyers fees etc under the expenses for transfer in computation of capital gain? Does Limitation act 1963 applies here?

Q2. If an assessee deposited the long term capital gain amount in infrastructure bond REC u/s 54EC, what will be the treatment of the principal amount received at maturty of the bond (interest is taxable)?

praveen

Chartered Accountant

5709 Points Posted on 26 August 2011

Originally posted by : Mihir
	Q1. If a capital asset such as a residential house is acquired after a long legal suit, can the assessee avail the expenses incurred for the lawyers fees etc under the expenses for transfer in computation of capital gain? Does Limitation act 1963 applies here? Expenses incurred for the purpose of affecting a transfer is allowed. If a legal battle is on, relating to tranfer of asset then it shall be allowed. For eg if it is for ownership etc I dont think such expenses shall be allowed. Q2. If an assessee deposited the long term capital gain amount in infrastructure bond REC u/s 54EC, what will be the treatment of the principal amount received at maturty of the bond (interest is taxable)? Principal is not taxable. More questions will come..............