Refund of tax paid earlier

Tax queries 356 views 2 replies

bobby

Others

60 Points Joined March 2013

Sir/Madam,

After deducting indexed cost of acquisition from the sale price of property - residential house my long term capital gains comes to 1 crore. Again after deducting 50 lakhs for 54EC bonds, my net LTCG comes to Rs. 50 lakhs, on which I have paid a tax of Rs. 10 lakhs. Now if I purchase property for a new residential house in 2 years or build one in 3 years, and utilize the remaining capital gains proportionately as set off, can I claim a refund of Rs. 10 lakhs, if I file a belated return, revised return or an updated return or condonation of delay request, can I claim refund of the Rs. 10 lakhs that I have already paid. What would be the best approach if it is possible to claim the said refund of Rs. 10 lakhs.

Replies (2)

Rama chary Rachakonda

Master in Accounts & high court Advocate

9586 Points Joined December 2011

When you reinvest the remaining capital gain in a new residential houe within the stipulated time (purchase in 2 years or construction in 3 years), you can claim exemption under Section 54of the income tax act for the proportionate amount reinvested.

File an updated return (under Section 139 (8A) of the income tax act, if eligible.

You cannot claim a refund simply by a condonation of delay rquest for the tax already paid without adjusting the capital gain exemption.

The best approach is to :

Reinvest the remaining capital gain in a new residential property within the prescribed time.

Claim exemption under Section 54for the invested amount in your revised/updated return.

The tax paid on the exempted portion will be eligible for refund after the exemption is allowed.

bobby

Others

60 Points Joined March 2013

Thanks for your information.

1.Suppose I sell my immovable property towards March end of the Financial Year and I have to move to another city, it will take time for me to transfer the bank accounts to the new city. In this case, for 54 EC bonds, can I apply within 6 months of the date of sale but before filing the returns and claim exemption for the same.

2. Can I put the unutilized taxable amount of Capital Gains in Capital Gains Accounts Scheme and then from this put the amount in 54EC bonds if the date of filing of ITR is over and then file an belated return?

3. Do I have to take the signature of the AO before closing the CGAS account and how to find my AO (is it of the city where the old asset was sold or of the new place that I migrate to)?