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questions to practicing CA and CA final student on capital gain real life issue...

Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 pranjali asked about 3 years ago

We sold one HP for 62L and ICOA is 30L and its the LTCG for that HP and purchased two HP for 15L and 11L I'll get the exemption u/s 54 for 15L and for rest i cannot put my money in 54EC bonds and 54GB company.... Please guide where to put money to get deduction or exemption??

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Data?1494421738 samkit kothari answered about 3 years ago

Your total C.G is Rs. 32L from which you purchased H.P of 15L + 11L = 26L remaining 6L according two you, but you can claim the expemtion against one house only as u have sold only 1 house. However, two or more residential houses purchased can be classified as one single residential house, the exemption under section 54 can be allowed. Some of the relevant judicial pronouncements are 1)**[D. Anand Basappa v. ITO 309 ITR 329 (Kar.) (2009)]** 2)**Two adjoining flats converted into single residence, exemption allowed. [ACIT v Mrs. Leela P. Nanda 286 ITR (AT) 113 (Mum) (2006)]** But as u said that you are taking the exemption of Rs. 15L u/s 54 so remaining capital gain is Rs. 17L there are two ways to 1) Invest in bonds, eligible bonds RECL (Rural Electrification Corporation Ltd), NHAI (National Highways Authority of India) invest can be made upto 50L, but the invetment to be made within 6 months of sale of property. 2) Sec 54 GB :- You can subscribe in the equity shares of an eligible company before the due date of furnishing of return of income under sub-section (1) of section 139.

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