Taxation
sam
(Querist) 22 December 2013
This query is : Resolved
Dear Sirs and Madam:
I am nri looking for answer everywhere my question about tax is as follows hope some will me releif:
bought land 2000 2 lakh sold 55 lakh 2010
bought land after 6 months in 2010 on constructiion linked plan in sold in between for 42 lakh since it was construction linked plan within 1 1/2 yr 2012
Rest of the money 55-42= 13 was in the bank.
till date not filed itr my question is
there any 300% penalty in this case or what are my tax liabilties
i ask senior most to answer question please
Rajeev
thanking you for anticipation.
sam
(Querist) 22 December 2013
further reinvested money from earlier booked flat after last transaction of 42 lakh
Thanks RJEEV
R.K Nanda
(Expert) 22 December 2013
consult tax lawyer.
malipeddi jaggarao
(Expert) 22 December 2013
The following RBI circulars may help you. Please down loan and go through:
1. FEMA 21/2000-RB – 03/05/2000
2. FEMA 62/2002-RB – 13/05/2002
3. FEMA 65/2002-RB – 29/06/2002
4. FEMA 64/2002-RB – 29/06/2002
5. FEMA 93/2003-RB – 09/06/2003
6. FEMA 146/2006-RB – 10/02/2006
7. FEMA 200/2009-RB-05/10/2009
8. And relevant circulars
9. RBI-2012-13/4 Master circular No.4/2012-13
C. P. CHUGH
(Expert) 22 December 2013
Dear Rajeev,
Here is answer to your questions
Question-01.bought land 2000 2 lakh sold 55 lakh 2010 bought land after 6 months in 2010 on constructiion linked plan in sold in between for 42 lakh since it was construction linked plan within 1 1/2 yr 2012
Ans : Being NRI the buyer of your property was obliged to with hold tax on purchase of property from you. It has not happened because, i believe, you have not disclosed your status.
You have sold some property in 2010 (said to be purchased in 2000) on which you gained Long Term Capital Gains. Since major portion of capital gain was reinvested in residential property, and remaining was kept in a separate bank account, considering the indexed cost of your acquisition and your net LTCG with and also maximum amount not chargeable to tax (assuming you have no other income in India)..........you have fulfilled your obligations and were not required to pay any tax (subject to actual calculation).
and also subject to provisions of section 54.
However it was prudent on your part to disclose facts by furnishing return of income which you did not do. The department may ask for return of income any time within six years........though no tax may come out to be payable for that relevant year.
Q 2 bought land after 6 months in 2010 on constructiion linked plan in sold in between for 42 lakh since it was construction linked plan within 1 1/2 yr 2012
Ans : As per law you were required to either purchase within two years or construct within three years the new asset. Though you proceeded to construct with in three years by subscribing to construction link plan, you were further required to retain the new asset for a period of three years from the date of its completion of construction. Having failed to do so, you have made your self liable for with drawl of exemption already granted to you in the year 2010 and now you were required to pay tax on entire long term capital gains calculated earlier in the year of with drawl i.e 2012.
Q-3. till date not filed itr my question is
there any 300% penalty in this case or what are my tax liabilties
Ans : Since you can still file your return of income for the year 2012 by 31st March, it is advisable to furnish your return of income as soon as possible and discharge your tax liability in consultation with a local tax lawyer/CA. The Income tax Act does not provide for any penalty of 300% as mentioned in your question, however, failure to submit return and failure to pay due taxes attracts various penal provisions of the law.
Hope this satisfies your queries. Need more information please write to cpcservices@gmail.com
R.K Nanda
(Expert) 22 December 2013
nothing to add more.
sam
(Querist) 23 December 2013
so after indexation i have to pay tax on amount which would be 20% or 30% please let me know.
when iam asking say ca they say AO may impose penalty of 300%
Is there still some ways i can still save tax
by buying some bonds or any other things which i dont know.
Thanks
Rajeev
C. P. CHUGH
(Expert) 23 December 2013
LTCG is payable at flat rate of 20%. Since it is not deemed capital gain, no option of either re-investing or investing in bonds is available. You are simply required to discharge your liability.
C. P. CHUGH
(Expert) 23 December 2013
Please read "now" for "not"
Vineet
(Expert) 27 December 2013
May I request the Ld Experts to kindly refrain from replies like
"Consult a Tax Lawyer",
"Follow the advice of above expert",
"Nothing more to Add",
"Well advised by experts".
The only thing then left is "CONSULT A LAWYER"!!!
Coming to query, there are few facts missing:
1. Please give exat dates or alteast months to calculate tax liabilities. Prima facie there is long term capital gain of Rs 55 Lakhs which results in capital gains tax of Rs 11 Lakhs in AY 2011-12.
2. What was amount invested in new construction linked plan. When this amount was invetsed. What happened to balalnce amount? Did you keep the balance amount in any capital gains scheme before 31-7-2011. I presume you have not.
3. When was this new property sold and for what price. This amount of Rs 42 Lakhs is confusing.
4. When the flat was booked and what amount has been invested in it out of sale proceeds of this new property.
All these questions are inportant before deciding your tax liability. Firstly the exemption for first transaction in 2010 is governed by section 54F and not section 54. You will get some tax relief if the new investment has been made as per the law.
For second transaction prima facie you are not eligible for any relief. By selling this new asset within 3 years, the relief obtained in 2010 has been exposed for withdrawal in 2012 in become taxable in that year. However, there is a ray of hope as well as concern. The new flat. If it was purchased after purchase of new property, you automatically become ineligible for benefit u/s 54F. If purchased after sale of this new property, you get benefit u/s 54F / 54 as the case may be for the exemption withdrawn.
Sounds complicated??? Actually it isn't. Since all the facts are not there, this big lecture.
Yes, you have missed the bus by not filing return for AY 2010-11. If case is reopened, you are certainly exposed to penalty amounting from 11 Lakh to Rs 33 Lakh. So pray that transaction does not come to fore.
I hope all the transactions have happened from your NRO account that is non repatriable funds.
