Regarding capital gains from the sale of house property

I am a senior citizen aged 81+. I intend to sell my house at Hyderabad in year 2016. The property was constructed in a plot purchased in year 1976 , the construction of which was completed in 1978 and some additions were done between years 1978 to 1981. The cost of acquisition of plot was Rs.11560 and cost of construction of the house total is Rs.45000(for which I do not have receipts or details at present). The sale of the property will be Rs.50 lakhs in 2016.
I wish to invest in schemes under Section 54 EC. Should I open an account under Capital Gains Account Scheme and transfer or purchase bonds? I understand that you can not use amount in CGAS account for purchase of Bonds. You can use only for purchase of another house or capitail asset.
Is it possible to deposit in my normal S/B account (individual) the entire sale proceeds and purchase bonds? Or should I open an account in CGAS  and purchase the bonds ,specified in section 54 EC?
I request help.Request advice to my mail address as I have some hearing problem
 
Asked 2 months ago in Capital Gains Tax from Hyderabad, Telangana
Hello Uncle,
you can receive the proceeds from the sale of the house property in your saving bank account. and within six months of the sale transaction you are required to invest only the capital gain(NOT the whole proceeds) amount in bonds under section 54EC.
you can take fair market value of your house as on 1st April 1981 as the cost of the house. you can get  registered valuer report to justify fair market value of your house to calculate the capital gain from the sale of the house property.
As your house was constructed before 1981, there is no need to have all the documents, you get the valuation done to arrive at fair market value as on 1981.
if you are not planning to purchase or construct a house within period of 3 years, there is no need to deposit the capital gain amount under CGAS.
it is only applicable where you have planning to purchase or construct the house in near future.
So you can get the sale proceeds in your bank account. if the amount of sale exceeds Rs 50Lakhs the buyer is required to deduct TDS of 1% from the sale proceeds you can claim later by filing your return
Vishakha Agarwal
CA, Bangalore
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Sir in your case the proceeds should be invested in Bonds or in CGAS. If you invest in CGAS then that amount shall only be used for the purchase or construction of property as per the provisions of It Act.

You can put the amount in normal SB Account and invest in Bonds to get full exemption. 
You cannot put in both CGAS and Bonds.
Shyam Sunder Modani
CA, Hyderabad
955 Answers
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1. There is no problem in which account you deposit. The bonds shall be purchased in your name.

2. The bonds shall be purchased in your name. You can put their name as nominee.
Shyam Sunder Modani
CA, Hyderabad
955 Answers
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Hello Uncle, sorry for delay in reply 
uncle you can receive the proceeds from sale in joint saving bank accounts. Joint holder of the account can be any one (wife , son or daughter)
and also you can invest in 54EC in joint names.
the main purpose to claim capital gain exemption is that investment should be made within the time frame. i.e 6 months from the sale proceeds
uncle you are right, there are many case laws i favour of the assessee where assessee invest in bonds or purchase the property in joint name.
Just make sure you invest the capital gain amount within six months .

here is link of case reference:
http://taxguru.in/income-tax/deduction-54-54ec-denied-investment-joint-names.html
Note- no payment is required. Thanks
in future for any query you can  also mail me at agarwalvishakha23@gmail.com
Vishakha Agarwal
CA, Bangalore
213 Answers
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Dear Sir,

1. you can receive the proceeds from the sale of the house property in your saving bank account and within six months of the sale transaction you are required to invest the capital gain amount in NHAI/REC bonds under section 54EC.

2. You dont need receipt for improvement done beofre 1.04.1981. you can take fair market value of your house as on 1st April 1981 as the cost of the house and then use indexation. you can get  registered valuer report to justify fair market value of your house to calculate the capital gain from the sale of the house property.

No need of opening any CGDS account.

Please feel free to call/revert in case of any doubts

Thanks and Regards
Abhishek Dugar
CA CS B.com
Caabhishekdugar@gmail.com
Abhishek Dugar
CA, Mumbai
766 Answers
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