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Dr. Vinok K. Singhania on the Income-tax Act, 1961
  • Benefit u/s 54F if 50C Value is too high than sale consideration

    by ANIL on Friday, July 31, 2015 at 07:34 PM

    An assessee sold land for 12 lacs (50C Value being 60 lacs). Indexed cost of acquisition is 2 lacs. He invests 12 lacs in purchase of a house. Can he get 100% deduction u/s 54F as or will he be liable for tax on 80% of LTCG 58 lacs after giving effect of 50C Value. In the later case, is it not highly unjustified to pay tax of 9.56 lacs besides investing whole of sale consideration. Will position differ if he would have sold house instead of land i.e., in case of claiming deduction u/s 54 ?

    Replied byDr. Vinod K SinghaniaTax Management Consultant Date: 17/08/2015

    It is a debatable point whether the provision of section 50C is applicable for computing exemption under sections 54F and/or 54. Supreme Court ruling is not available. If the Assessing Officer does not give any favourable decision, the assessee will have to go in appeal.
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