Capital Gains

In order to claim section 54 exemption under Capital Gains, shall I invest in land and the purpose of purchase of land is to construct a house. Assuming land cost already I have incurred and no construction cost till the due date of filing return of income and no amount has been deposited in the capital gain deposit account scheme. In this case what is the exemption I can claim under section 54?
Replies (5)

Only upto the cost of land.

I was waiting for your answer sir. thanks a lot. many instances in the past u had clarified my doubts. my another query here is that section 54 allows exemption if we purchase or construct a house property but in this case we are purchasing only a land and the intention of constructing a house is also not established as we have not deposited anything in the capital gain deposit account scheme. so if section 54 exemption is allowed in this case then will it not defeat the intention of section 54?
kindly clarify sir.

It will surely, if you do not produce evidence of construction in-progress, whenever the query been raised by ITD. Also it has to be completed by 3 years from the date of sale of original HP. So, if query raised after 3 years, you should be ready with completion certificate!!

thanks a lot sir
Sir, as per exemption 54 EC ,bank deposit option is not there. Assuming X transfers long term capital asset on 31st March 2019 and has capital gain and he has 6 months time period to invest in notifed bonds to claim exemption under 54EC but his due date of filing return is 31 st July and as on 31 st July he has not invested in any notified bonds then what will be his tax consequences for the financial year 2018- 19.

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