Query - Capital Gains - Sec 54 & 54F - Income Tax

CA Lovenish Bansal (JOB) (343 Points)
Replied 06 May 2009

Hi, Mr. Rajeev Aggarwal,

Furniture & Fixture is Personal Assets This are excluded from the definitions of Capital Assets So Gain arising of fixed assets is not taxable at all So you can avail the exemption of u/s 54 only.

Thanks

Lovenish Bansal

CA Lovenish Bansal (JOB) (343 Points)
Replied 06 May 2009

Gain arising on fixed assets must be read as furniture & fixture in above reply. sorry for mistake

Thanks,

Lovenish Bansal

shammi (student) (42 Points)
Replied 08 May 2009

hi mr rajeev gain arising on sale of furniture and fixture will not be exempt in any case it will be fully taxable as short term capital gain

VIPUL BUBNA (MANAGER TAXATION) (119 Points)
Replied 08 May 2009

On the above topic of section 54F one interesting query is there:-

According to section 54F if the amount received from sale of Capital Asset is not utilised for purchase/construction of the new house till the due date of submission of return of Income then it should be deposited in 'Capital Gain Deposit Account Scheme' before the due date for filling the return of Income.

Whether the amount received on sale can be utilised for some other purpose between the period of sale and due date of filing the return of Income, When I can deposit the amount in 'Capital Gain Deposit Account Scheme' .

CA Lovenish Bansal (JOB) (343 Points)
Replied 08 May 2009

Hi, Mr Rajeev Aggarwal,

Short term Capital Gain/Loss arise on furniture & fixture if it is used for Business Purpose. if it is household furniture than there will be not capital gain on it.

Thanks,

Lovenish Bansal

Suman Inani (Job) (38 Points)
Replied 29 June 2009

Mr.Vipul Bubna

The sale proceeds can be utilised for any purpose from the date of sale & up to the last date of Filing Return u/s 139(1), however for claiming exemption u/s 54 /54F the sale proceeds must be deposited in an A/c opened in Capital Gain A/c Scheme before the last date of Filing Return u/s 139(1).

For Example if u sell a LTC Assets on 01/04/2009 then you have to deposit the sale proceeds before 31/07/2010 & between 01/04/2009 to 31/07/210 the above amount can be utilised for any purpose.

Pammi Srivastav (Assistant Finance Officer ) (84 Points)
Replied 15 September 2009

First of all furniture and fittings being depreciable asset, the gain from the same will be short-term capital asset and not long-term capital asset. For claiming exemption U/S 54F the condition the asset transferred should be long term capital asset. Thus gain of furniture and fittings is not eligible for exemption u/s 54F. Section 54 also covers long term capital asset, thus the exemption will be available only under section 54 on gain on sale of residential house and not on the gain of furniture and fittings. He can claim exemption u/s 54EC by investing is specified bonds on the gain of sale of furniture and fittings.

MUDDASSIR SYED (ARTICLED ASSISTANT) (21 Points)
Replied 26 June 2010

A person got a long term capital asset was sold in June 2008 with a long term gain of Rs.20 lakhs, out of which 18 lakhs was used for purchase of land for the construction of residential house property and balance was deposited in the capital gains deposit scheme before due of filing of returns. In FY 2009-10, the same person got a long term capital loss of about 1.44 lakhs and is carried forward for set off. My question is if the residential house property is not constructed before 3 years from the date of sale i.e., june 2011 will the whole amount(Rs.20lakhs) be chargeable as long term capital gain or only which is deposited in capital gain deposit scheme (Rs. 2 lakhs ) as long term capital gian and whether long term capital loss carried forward can be set off with the capital gain arising in FY 2011-12 because of not satisfying the conditions specified in Sec 54? please refer case laws relating to sec 54 before answering.