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LONG TERM CAPITAL GAIN TAX Area

G MURALIDARAN (ADVISOR CREDIT AUDIT DEPT SBI IMA HYDERABAD) (35 Points)

23 March 2023

Good morning Sirs

i need advice on following:

I sold an immovable property and expected LTCG is around RS.50 lacs +.

the consideration was received a month back from now and 26QB with 1% TDS committed.

I intend to invest in 54EC BOND.

i need clarification

1. Can I invest in 54EC bond before 15th of May 23, ie before filing ITR for AY23-24.and such investments are accounted for AY23-24.

2. If I invest in 54EC bond after 31/03/23, whether, this investment will be accounted for AY 24-25, and if so, the chances of further such investments in AY 24-25 is possible? ( because of permitted limit of RS.50 lacs may get exhausted.

With warm greetings to one and all in the forum,

Regards

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5 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (174190 Points)
Replied 23 March 2023

1. Yes

2. Not permitted, as the limit is for the transaction w.r.t. different years.

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G MURALIDARAN (ADVISOR CREDIT AUDIT DEPT SBI IMA HYDERABAD) (35 Points)
Replied 23 March 2023

Thank you Shri Dhirajlal Rambhia Sir

my query No.2)

the LTCG received during AY23-24 and the time permitted to invest the LTCG amount upto Rs.50 lacs till the filing of ITR for the AY 23-24 ( say 31/07/23). If I invest it after 01/04/23 but before 31/07/23, if I go in for booking of one more LTCG during 01/04/23 to 31/03/24, whether I am eligible for investing under 54EC FOR AY 24-25 as the earlier investment is for AY 23-24 sale consideration.

regards

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (174190 Points)
Replied 23 March 2023

Technically, you can claim maximum 50 lakhs in ITR for AY 2023-24, so when will you claim additional amount invested in AY 2024-25?

Only possible for any different transaction in AY 2024-24, isn't it?

That is what I have already replied as 'Not permitted w.r.t. same transaction.'

G MURALIDARAN (ADVISOR CREDIT AUDIT DEPT SBI IMA HYDERABAD) (35 Points)
Replied 23 March 2023

Thank you once again sir,

I think I have not made it clear.

the transaction fructified in Feb-23 is a separate one, for which I am having time upto the date of filing ITR for AY 23-24 (expected investment is to the level of permitted limit).

the second one is that, I am planning to dispose of another property during AY 24-25, for which can I invest in 54EC within 6 months of date of transaction and hope such investment of 54EC of PY will not be counted to arrive the total in AY 24-25.

hope now I made it clear.

regards

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (174190 Points)
Replied 23 March 2023

As per first proviso of the act, you are not allowed to invest more than Rs. 50 lakhs in the bonds in any financial year, hence in that case you have to invest only after April 2025. So, plan the second sell accordingly.

Good luck.