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Long term capital gain querry

Anu Verma (Student) (44 Points)

30 June 2012

we have purchased a land of 25 lacs in 2008 , in 2012 we sold it out for Rs. 80 lacs.

we want to invest in bond or in properties.so what amount should we go for the same.... Sale proceed OR the capital gain of the same ??

please replyy

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16 Replies

@*CS Siddharth Bumb. * (B.Com, CA Final, CS ) (5270 Points)
Replied 30 June 2012

Dear,

There will be long term capital gain...

1) To avail exemption you can invest in National Highway Authority of India's Bond or in Rural Electrification bonds within 6 month from the date of sale under section 54EC...

or/and

2) Section 54F : You can invest in house property . But if you are purchasing house property, such property should be purchased within 2 years from the date of sale and if you are constructing house property then construction should complete within 3 years from the date of sale.

Amount received from sale should be deposited in Capital gain account scheme in any nationalised bank...

Rectify me if I am wrong...

Regards,

Siddharth Bumb.

sidbumbhelp @ gmail.com

WWW.SIDDHARTHBUMB.BLOGSPOT.COM

3 Like

(Guest)

There is a Long Term Capital Gain, taxable under the head Capital Gain, however, to avail exemption amount of Net Consideration shall be invested in Long term Infrastructure bond with in 6 months from the date of sale.

@*CS Siddharth Bumb. * (B.Com, CA Final, CS ) (5270 Points)
Replied 30 June 2012

@ Abhinav : I have a query on your post that

Indexed cost of acquisition will be deducted from sale consideration and I will get long term capital gain..

whatever capital gain i get only such amount should be invested to avail exeption u/s 54EC.. then why sale consideration should be considered here?

(Guest)

@ Siddharth : I modify my reply

@*CS Siddharth Bumb. * (B.Com, CA Final, CS ) (5270 Points)
Replied 30 June 2012

@ Abhinav : why net consideration?

if you are claiming exemption u/s 54F, then by using formula you need net consideration but for investing in long term infrastructure bond only long term capital gain will considered na.. not net consideration

(Guest)

@ Siddharth : my opinion is based on section 54EC.

Anu Verma (Student) (44 Points)
Replied 30 June 2012

Long term capital gain shoulb be considered ..i think

@*CS Siddharth Bumb. * (B.Com, CA Final, CS ) (5270 Points)
Replied 30 June 2012

@ Abhinav : as per my study and knowledge maximum allowable exemption is "amount of long term capital gain or amount invested in such bonds whichever is lower" and not net consideration...

Lucky (STUDENT) (21 Points)
Replied 30 June 2012

Dear Abhinav,

Siddharth is right, we have to invest equal to LTCG if we want to claim full exemption u/s 54EC.

CA ANU RAO (CA IN PRACTISE) (128 Points)
Replied 30 June 2012

Long term capital gain amount should be invested ( net consideration- Indexed Cost of acquisition) - The maximum permissable deduction u/s 54 EC is Rs.50 lakh in NHAI or Rural Electrification Bonds. Investment to be made within 6 months.

CA ANU RAO (CA IN PRACTISE) (128 Points)
Replied 30 June 2012

Vishwas V Rao ( Chartered Accountant) (239 Points)
Replied 30 June 2012

Invest an amount equivalent ot CG

S.Gomathi (Chartered Acountant) (25 Points)
Replied 30 June 2012

Invest the amount equivalent to Capital Gain.

CA Harsh N Gandhi (Asst. Manager - Accounts & Finance) (78 Points)
Replied 30 June 2012

Dear Abhinav,

Siddharth is right, only LTCG i.e the actual gains should be invested and not the net consideration. It will be LTCG and exemption can be claimed under Section 54EC or 54F provided prescribed condtions are satisified, Thanx.