Long term capital gain taxability or not

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One of my client being an Individual has received a Commercial Shop by way of Gift from his elder Brother in Financial Year 2005-06. This Gifted Commercial Shop was sold in Financial Year 2010-11 for a Sale Consideration of Rs.15,00,000/- Now this entire Sale consideration is invested in another Commercial Shop in Financial  Year 2012-13.Now Query is what the Tax treatment in Financial Year 2005-06,2010-11  respectively after keeping in mind Capital gains Provisions as per I.T. Act whether the said Long term Capital gain is exempted us 54F of I.T.Act or not.

Please reply soon as I have to file I.T. return For Asstt.Year 2011-12 is to be filed prior to 29/02/2012.

Replies (1)

If assessee receives capital asset by way of gift then the cost to the previous owner is the cost of acquisition.

For claiming exemption U/s 54F the the entire sale consideration should be invested in the new HP. The Assessee should not own other HP other than this new one.

Moreover the amount should be deposited in Capital gains account of bank with 6 months from the date of transfer or before duedate of filing return in order to claim exemption. As in your case the due date has completed on 30/09/2011. It is not possible to claim exemption u/s 54F

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