Claiming exemptn. of long term cap. gains tax u/s 54ec+54f

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A vacant plot of land was sold for a net sale consideration of Rs.1,10,36,000/-. The fair market value, after indexation, of the land, as on 01/04/1981, was Rs.19,39,091/-. Hence, Long Term Capital Gain was Rs.90,96,909/-.

 

The following are the investments made and proposed to be made for claiming tax exemption:

1)Rs.50,00,000 in NHAI plus REC bonds for exemption u/s 54EC(now, investment already made),

2)Rs.60,36,000 in a residential property for exemption u/s 54F(proposed to be made)

 

Please advise:

a)computation of the total tax exemptions that can be availed,

b)total Long Term Capital Gains Tax payable after considering the exemptions. 


 

Replies (2)

Hi,

 

Find the calculation below:

 

 Net Sale consideration = 11036000

Indexed cost of asset = 1939091

Capital gains = 9096909

Less: Exemption

Sec. 50EC = 5000000

Sec. 54F = 4975439

Total exemption is 9975439 subject to maximum of capital gains which is 9069909/-

 

Hence, the whole of capital gains are exempt.

Computation u/s 54F:

(6036000 / 11036000) x 9096909 = 4975439/-

Thank you very much, Ashish.


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