Taxation on long term capital gain

According to Sec 50 C if the value assessed by the stamp valuation authority is higher than the actual sale consideration, such value assessed is deemed to be the full consideration on such transfer. If the assessee wishes to opt exemption under sec 54F exemption is available on proportionate basis of investment made which is computed as follows:

Long term Capital Gain  X Amount invested in new residential house / Net sale consideration.

Here what does this net sale consideration mean? either actual sale consideration or value assessed by satmp valuation authorities???

Replies (2)

Dear Vishnu,

Nice observation and well thought query........:)

Sec 50C comes with a "DEEMING FICTION"  - Now Rules of Interpretation says that "Deeming fiction" has to be applied "there & as it is" -

Means if Law has made you assumed something which cannot be understood as per common paralance then it has to be used strictly in construring that specific provision for which it is meant and that forced meaning cannot be applied to contrue the other parts of the act where that term or phrase has been used.

 

Let me explain in a different way - What is a difference between any term defined in Section 2 of any act and defined in any other Section. -

Generally the terms defined in Sec 2 carry the same meaning throught the Act & on the other hand where any term is defined in any other provision it's meaning is limited for the purposes of that section only.

 

Conclusion : For the purposes of Sec 54F- Net sales consideration will be computed based on actual sale price and not the one determined by Sec 50C.

AMIR IS RIGT.EXPLAINED IN GREAT WAY.

 ITS RIGT TO SAY ACTUAL NET CONSIDERATION SHALL BE TAKEN INSTEAD OF 50C

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