Tax exemptions

Sir whether the converted land is held for more than 3 years. If yes then he can get tax benefit by investing in one more flat for 3 Crores. It is exempted U/s. 54F

Sir answer already provided

Hi,

1. Flat sold for 5 Crores. Capital Gain amount not disclosed. You can claim Capital Gain Exemption for the 3 Crores proposed to be invested in buying a new house

2. You can claim exemption under 2 Sections. Section 54EC & 54F.

Section 54EC is for investment in Capital Gain Bond - REC or NHAI. Upto Rs. 50 Lakhs to be invested within 6 months from the date of sale of the Land.

Proportionate Exemption u/s 54F for the amount invested to buy a new Flat.

If you want a detailed answer, then request you to kindly share the Transaction details.

Hope this has clarified your query. Thanks.

Tax exemption shall be available for purchase of residential property under section 54

Hello Sir,

Could you please explain what do you mean by converted land in this context ?

Trust this clarifies your query.

Feel free to call / get back in case of further clarifications.

Thanking You.

Regards,

Rohit R Sharma

BCOM, ACA, LLB-GEN, CERT. FAFP

Dear Sir/Madam,

Yes, PRS can avail deduction under section 54EC upto INR 50 lacs by investing INR 50 lacs in NHAI/REC bonds and also proportionate deduction under section 54F by investing in new residential property.

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

Thanks and Regards

Abhishek Dugar

CA CS B.Com

As PRS and PSS are spouses and joint owners, the question of clubbing u/s 64 needs to be considered.

What is this conversion of land of 3 years old for Rs 5 Cr? Does it mean the land will be sold/transferred for Rs 5 Cr. If it is a gift, there will not be any tax liability. If it is a sale, there will be capital gains but still the likely hood of clubbing of income cannot be ruled out if documentation is not proper.

If it is a gift, the exemption is u/s 56. If it is a sale, the capital gains will be charged u/s 45.