Ltcg

Tax queries 230 views 3 replies

NIHA RAI

Others

5 Points Posted on 26 August 2015

I have few queries regarding LTCG

I bought a piece of land in 1998 and sold it in 2013 for a gain of ~ 10 Lac Rs. I received the amount through cheque which was deposited in a joint account. I have invested the entire amount in ainstallments for a residential appartment from a different bank account. Are these multiple installment payments valid for exemption under 54B ? I dont have a single transaction of 10 Lacs to be shown as re-investment, also the money spent was from a different account and the money received (from plot sale) was in a different account. Does that make any difference?

The new residential apartment that I purchased was bought before the sale of land but the EMIs continue even now (bought on home loan), does that make any difference?

Additionally I was a housewife when the plot of land was sold, with no other income other than the 10 lacs (indexed) capital gains. Is there anyway to avoid tax under total income?

In case I can not be exempted from tax, what is the penalty I am liable to if the sale was made in January 2013.

Keenly awaiting your responses.

Replies (3)

CMA Poornima Madhava

CMA

13117 Points Posted on 26 August 2015

I think you can avail exemption u/s 54F (not 54B). If the residential house is purchased within 1 year before the transfer of land, you can still avail the exemption. For more details: /articles/capital-gains-exemption-from-tax-u-s-54-54f-23471.asp

NIHA RAI

Others

5 Points Posted on 26 August 2015

Thanks for your response Poornima. But I am still confused about different accounts plus re-investment being done in installments.

So I have 2 accounts X and Y- I got the 10 Lac Rs from plot sale in Account X. But I was paying my EMIs for the new residential property from my account Y, while using the money in account X for other expenses/investments. Will the exemption still available to me ?

CMA Poornima Madhava

CMA

13117 Points Posted on 27 August 2015

It doesn't matter where you have credited the funds provided you have acquired the property within 1 year before the transfer. If not, then such amount should have to be transferred to capital gain deposit account before filing income tax return for the relevant year in which the capital gain arose.