capital gain exempted fron tax

8/7/2019 CAPITAL GAIN EXEMPTED FRON TAX

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CAPITAL GAIN EXEMPT

FROM TAX

PRESENTED BY,

VARNA.B


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CAPITAL GAIN ARISING FROM THE TRANSFER OF

RESIDENTIAL PROPERTY [Sec: 54]

Any capital gain arising from the transfer of a building

or land is exempt subject to the following conditions:

Building owned by an individual or HUF.

Such HP is being used as residential house

Such HP must be a LTCA

The income from such HP is chargeable under the head

inc from HP.


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The assessee within a period of one year before/ 2 yr

after the date of transfer has purchased a residential

property or constructed a new residential house within a

period of 3yrs from such date of transfer.

Maximum exemption which can be claimed is LTCG or

the COST OF NEW HOUSE, whichever is lower.


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1: From the foll info compute the capital gains liable to

tax in the ay 2010-11

Cost of acquisition of residential house in 1190-91= rs

5lacs

Sale consideration received in April 2009= rs 30lacs

Cost of construction of a new residential house before

the due date of filing the return for py 2009-10= rs

18lacs

CII: 1990-91=182; 2009-10= 632


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2: Mr Singh had a residential house which he purchased in

1981-82 for rs

1lac.The house was acquired by the

Govt in Aug 2009 & a compensation of rs 15,97,000

was paid to him. Immediately he purchased a

residential house for rs 12lacs. He sold the new

residential house in nov 2010 for rs 13lacs. An

additional compensation of rs 1lac was given to him in

nov 2010. compute capital gain for the ay 2010-11 &

2011-12.

CII in 1981-82=100; 2008-09=632


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CAPITAL GAIN FROM THE TRNSFER OF

AGRICULTURAL LAND IN URBAN AREA [Sec:54B]

Any CG resulting from the transfer of land used for

agricultural purposes situated in an urban area is

exempt subject to the following conditions:

The land was owned by an individual.

The land must have been used by the assessee or his

parent for agricultural purpose, 2yrs immediately

preceding the date of transfer.


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Within 2yrs from the date of transfer assessee has

purchased another land for agricultural purpose.

Maximum exemption is COST OF NEW LAND or

CAPITAL GAIN whichever lower.


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1: Mr Rahul purchased an agri land in an urban area in

1986-87 for Rs 1lac. He was using it for agricultural

purposes and in march 2010 he sold the same for Rs

8lacs. He purchased another agri land immediately for

Rs 2lacs & deposited Rs 1.5lacs in CAPITAL GAIN

ACCOUNTS SCHEME 1988.

Find out the CG taxable if any, for the AY 2010-11.

CII: 1986-87= 140; 2009-10= 632


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CAPITAL GAIN ON COMPLUSORY ACQUISITION OF

LAND OR BUILDING [Sec:54D]

Any capital gain arising on the transfer of land or

building as a result of compulsory acquisition is exempt

subject to the following conditions:

The assessee is engaged in an industrial undertaking.

The land or building or any right therein should formpart of the industrial undertaking.

Such asset is compulsorily acquired under any law.


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The assessee has used the land or building or any right

therein for thee purpose of the business of industrial

undertaking in the 2 yr immediately preceding the date

on which the transfer took place.

Within a period of 3 yrs of transfer, assessee should

have purchased or set up a new industrial undertaking.

Maximum exemption is the CAPITAL GAIN OR COST

OF NEW INDUSTRIAL UNDERTAKING whichever

is lower.


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1: Hindustan chemicals Ltd has an industrial undertaking

in west bengal. The company had a building

constructed in 1981-82 used for industrial purposes.

The building was acquired by the WB Govt on 1stjune

2009 for Rs 12lacs. The WDV of the building on

1/4/2009 was Rs 7.5lacs. The company constructed

another building for the same purpose in march 2010 at

a cost of Rs 6lacs. Determine the taxable capital gain

for the AY 2010-11.


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CAPITAL GAIN ON TRANSFER OF LONG TERM

CAPITAL ASSET INVESTED IN LONG TERM SPECIFIED

ASSET

[Sec : 54EC]

If an assessee transfers a LTCA and invest the capital

gain in long term specified asset, the assessee shall be

entitled to claim exemption from tax on capital gainsubjected to the following condition:

o The new asset (notified bonds issued by NHAI or

RECL) should be purchased within 6 months from the

date of transfer of the asset.o If the new asset is transferred or converted into money

within 3 years of the date of acquisition, the exempted

about of capital gain shall be chargeable as LTCG of

the previous year in which the new asset is transferred.


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o Maximum investment restricted to Rs 50lacs in any

financial year.

Maximum exemption is cost of new asset or LTCGwhichever lower.


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1: Mr X provides the following information regarding the sale

of his residential house.House purchased in 1991-92 = Rs 5 lacs

Sold in Jan 2010 = Rs 30 lacs

Purchased another residential house in Feb 201

0=

Rs 5 lacsInvested in bonds of RECL in March 2010 = Rs 2 lacs

Invested in bonds of NHAI in March 2010 = Rs 1 lac

Compute the amount of capital gain to be included in the totalincome for the AY 2011

CII in 1991-92 = 199 and for 2009-10 = 632


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LTCG ON INVESTMENT OF THE CONSIDERATION

IN RESIDENTIAL HOUSE [Sec 54 F]

LTCG get exemption get under this section if the

following conditions are satisfied.

The assessee is either an individual or a HUF.

The assessee has transferred a LTCA except a

residential house.

The assessee does not own more than one residential

house on the date of transfer.


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The assessee purchases within a year before or within 2 years

after the date on which the transfer took place or constructs

within a period of 3 years after the date of transfer, residential

house.

If the cost of new house purchased or constructed is not less than the

net consideration in respect of a capital asset transferred, the

entire capital gain arising from the transfer will be exempted

from tax.

If the cost o newly acquired house is less than the net considerationof the asset transferred, the exemption from the long term capital

gain will be proportionately reduced.


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1: Dr. Reddy is a resident of Delhi. He lives in a rented house. He

had purchased jewellery of Rs 2lacs in April 1981. He sold the

jewellery in march 2010 for Rs. 15lacs and immediately

purchased 2 residential house one at Mumbai for10lacs and other

at Bangalore for Rs 5lacs. Commute taxable capital gain if any.

What will be the taxable capital gain if he had :

a) Use the entire amount of Rs 15lacs to purchase only one

residential house.

b) Use Rs 8lacs to purchase one residential house at Bangalore and

deposited in a bank.

CII: 1981-82= 100 & 2009-10= 632


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CAPITAL GAIN ON SHIFTING OF INDUSTRIAL

UNDERTAKING FROM URBAN TO NON URBAN

AREA [Sec:54G] The assessee transfers a capital asset(long term or short

term in nature of plant, machinery, building or land or

any right in the building or land.

Such asset should have been use for the purposes of the

business of industrial undertaking situated in urban

area.

The asset should have been transferred in connection

with the shifting of the undertaking from urban to a non

urban area.


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The amount of capital gain should be utilized with in a

period of1 yr before or within 3 yrs of shifting.

Maximum exemption is the cost of new asset and

expenses incurred for shifting or the capital gain which

ever is lower.


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CAPITAL GAIN ON SHIFTING OF INDUSTRIAL

UNDERTAKING FROM URBAN AREA TO ANY SEZ

[Sec: 54 GA]

The assessee transfer a long term or short term capital

asset in the nature of plant, machinery, building or land

or any right in building or land.

Such asset should have been use for the purposes of the

business of industrial undertaking situated in urban

area.

The asset should have been transferred in connection

with the shifting of the undertaking to any SEZ.


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The amount of capital gain should be utilized with in a

period of1 yr before or within 3 yrs of shifting.

Maximum exemption is the cost of new asset and

expenses incurred for shifting or the capital gain which

ever is lower.


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THANK YOU

capital gain exempted fron tax

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