Proviso to Sec 112(1)(a)

Tax queries 4315 views 2 replies

Pravin Chavan

Chief Financial Officer

24 Points Joined July 2009

Hi,

I have a querry. In case of an Individual assessee having total income other than LTCG, less than minimum exemption limit and also having LTCG on sale of property. Thus, the proviso to Sec 112(1)(a) for relief is applicable.

Can the "A" claim the benefit of Indexation ? What will be the rate of tax on LTCG on sale of property ? In the reutrn of income ITR - 2, if the proviso to Sec 112(1)(a) is applicable, cost of acquisition without indexation is only to be deducted.

can anyone explain?

CA Pravin Chavan

Replies (2)

CA CS Bhumika Thakkar

CA CS

1618 Points Joined January 2008

d limit of basic exemption can be exhausted..rest LTCG will be taxed at 20 % and indexation is allowed..

Arpit Gupta

Chartered Accountant

95 Points Joined December 2008

if a person having LTCG, but his income is less than exemption limit, he can definetly claim the benefit of exemption limit. He should shift his LTCG towards his balancing exemption limit.

if there is LTCG along with STCG then first the LTCG is shifted and then STCG

rate of LTCG u/s 112(1) is 20%

if it is LTCG then indexation will certainly allowed. Indexation is not allowed only in following cases -

1. Slump Sale u/s 50B

2. Debentures and bonds except Capital Index Bond

3. in case of NRI's Sec.115A to 115D

Hence cost of acquition along with indexation is allowed to be deducted