Tax on capital gain
Partha Chattopadhyay
(Querist) 30 March 2019
This query is : Resolved
On selling an ancestral residential house, a capital gain of Rs 2 lakh was made during 2018-19.Now, because of 31st March being a Sunday (Holiday) it is proposed to purchase a capital gains bond (Rural Electrification) of Rs 2L during the week ending on 6.4.2009. Can I claim tax relief for AY2019-20 though I am late by a week in purchasing this bond? Looking for your opinion..
B.Chakrapani Warrier
(Expert) 01 April 2019
To get exemption, the capital gain has to be invested with in a period of six months after the date of transfer of property, meaning thereby if 6-4-2019 is with in the said six months,eligible for exemption u/s 54 EC in asst. Yr. 2019-20.
Partha Chattopadhyay
(Querist) 01 April 2019
Thank you, Mr Chakrapani for your kind response. Well, the date of transfer was during July 2018 and the six-month period ended in January 2019. Now, if I purchase the capital gains bond now in April, will it be condoned by IT for late investment for this marginal delay? Or how can I save such huge capital gains by any other investment?Can you please suggest?
ramesh
(Expert) 16 April 2019
Section 54EC provides that if an assessee invests LTCG within a period of six months from the date of transfer in specified assets (bonds of NHAI/REC) then LTCG so invested shall be exempt from tax. However, if the gains are not so invested up to the date of submission of return of income (July 31 in case of individuals), then one should deposit the money in �Capital Gain Account Scheme� (CGAS) with a nationalised bank. The proof of deposit should be submitted along with return of income. Therefore, you must deposit the amount in CGAS if you fail to invest in the prescribed bonds before the due date of return. This deposited amount must be utilised for the purchase of the bonds by September if you wish to claim exemption under Section 54EC.
