I have two flats in my name in Noida/Greater Noida. The third property at Lucknow came to us by succession and is shared between me and my brother. We plan to sell it soon. The property was bought at a cost of Rs. 1,54,367 in FY 2001-02 by my father I plan to to invest my share of the sale proceeds in one of the the following manner:- Plan A 1. Take full advanatage of Section 54EC by purchase of Capital Gains Bonds. 2. Invest balance amount in purchase of a flat with exemptions of Section 54F. Plan B 1. Take full advanatage of Section 54EC by purchase of Capital Gains Bonds. 2. Pay Long term capital Gains on the balance amount and utilise it for other purposes. Please advise:- 1. Either of the two plans are valid as per existing Tax Rules. 2. If the sale proceed is received in mid May 2018 when should I (a) Pay Long Term capital Gains (Plan B). (b). File Tax Returns. 3. The Indexed Cost of Acquisition for my share. Thanking You RK Prasad
Hi
1. Valid. But exemption will be under section 54 and not under 54F.
2. If property is registered in May 18, pay capital gains immediately of exceeding 10000 to avoid advance tax non payment interests, or at the time of return filing. Return filing will be upto 31st July 2019.
3. (154367/2)*2.72 will be your share in costs.
# I assume the inherited property was a house property and not a land.
Good Morning Prasad Ji
1 Yes both your planning are right but in 1st plan section you have to use is 54 instead of 54F
2 if Transaction done in May 18 then you have to pay LTCG Tax by 15 June as advance tax
ITR to be filled after 31-03-2019
Capital gain index for FY 2018-19 not yet declared thus not able to calculate the same.
Hi,
1. The proposals by you are valid but the exemption is u/s 54 and not under 54F.
2. You should pay the capital gains If property is registered in May 18, pay capital gains immediately at that time. You can file the return by 31st July 2019.
3. The indexed cost of acquisition of your share will be (154367÷2)÷100×272 = Rs.209939
Hope this clarifies.
Regards,
Nikhil
Dear Sir,
1) Plan A is not valid as you would not be available for exemption u/s 54F due to possession of two flats already. Take benefit u/s 54 instead of Sec.54F.
Plan B is valid.
2) (a) Capital gain is chargeable in the year of transfer of capital asset and not in the year of realization of sale proceeds. If asset is transferred in May 18 also, you need to deposit capital gain amount into REC bonds within six months from the date of transfer i.e. it should be deposited by Nov.18 otherwise the doors for investment u/s 54EC will be closed and you need to exhaust other options to save tax.
On the balance unutilised amount, pay advance tax in four installments. Tax rate should be 20.6%.
(b) Last date to file tax returns would be 31.07.2019
(c) Cost inflation index for F.Y. 2018-19 is not available till date. Till F.Y.2017-18 it would be Rs.2,09,939
Thanks
Hi,
1. Yes, both the plans are valid but just a one correction in option 1 that you are eligible for exemption under section 54 and not 54F.
2. Receipt of money is irrelevant. Sale of flat is relevant. Assuming you sale your flat in May 2018, you will have to pay tax before 15 June 2018 and file your return by 31 July 2019
3. It's (154367*2.72)/2
Please feel free to call/ revert in case you need more clarity.
Thanks and regards
Abhishek Dugar
CA CS B.Com
Hi,
Your answers are as below:
1) You will not be eligible for exemption u/s 54F as you already own 2 Residential Flats. However, if the property in Lucknow is Residential you can claim exemption u/s 54 if you acquire another residential property out of the amount of Capital Gains earned through sale of Lucknow Property. If the property at Lucknow is other than residential, you will not be eligible for any exemption u/s 54 also. As such, in that case, only Plan B shall be valid.
2) (a) If you receive the sale proceeds in May 2018, you will have to pay Tax before 15.09.2018 in order to avoid any tax on late payment.
(b) Due date for filing of ITR shall be 31.07.2019
3) The indexed cost of acquisition for you shall be 1,54,367 x (CII for FY 2018-19) / 100. CII for 2018-19 not yet declared.
Regards,
