Capital gains taxation query vip 1

Tax queries 215 views 3 replies

Hi,

Can anyone comment on the LTCG taxation on sale of house property in following case?

Year 1 ltcg 50 lakh on sale of house property. Bonds purchased under section 54EC 40 lakhs. Amount deposited in CGAS 20 lakhs. How much will be the ltcg liable to tax - a. 0 lakh, b. 10 lakhs, c. 30 lakhs.

Year 4 no property purchased hence nil withdrawl from Cgas. How much will be the ltcg liable to tax - a. 0 lakh, b. 10 lakh, c. 20 lakh, d. 50 lakh.

Please also give the reasons why?

Replies (3)
  1. Rs. 0 lakhs
  2. Rs. 20 lakhs.

thanks for the reply.

One more question on 2nd answer.

Does it imply that in case LTCG in yr 4 is 20 lakhs, then deduction provided u/s 54EC is effectively 30 lakhs instead of 40 lakhs deposited? 

That is the net effect but it will not alter tax liability.


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