Income Tax: Investments of up to Rs 50 lakh in specified bonds tax exempted

By: |
New Delhi | March 08, 2017 3:46 AM

I had entered into an agreement to sell a part of my land (purchased for more than 10 years ago) in January 2013. The sale deed was signed only in May 2016. What shall be the value of the sale consideration?

The sale consideration shall be deemed to the stamp duty value as on the date of agreement to sell i.e. January 2013. (Reuters)

I had entered into an agreement to sell a part of my land (purchased for more than 10 years ago) in January 2013. The sale deed was signed only in May 2016. What shall be the value of the sale consideration?

—Ajay Sood

As per Section 50C introduced by the Finance Act, 2016, where the date of the agreement fixing the amount of consideration for the transfer of immovable property and the date of registration are not the same, the stamp duty value on the date of the agreement may be taken for the purposes of computing the full value of consideration. It is applicable only in a case where the amount of consideration has been received by way of an account payee cheque or account payee bank draft or use of electronic clearing system through a bank account, on or before the date of the agreement for the transfer of such immovable property. The sale consideration shall be deemed to the stamp duty value as on the date of agreement to sell i.e. January 2013.

Are investments made in specified bonds beyond the time limit under Section 139(1) eligible for exemption under Section 54EC?

—Siddharth Alag

The exemption under section 54EC up to R50 lakh would be available only if the capital gain arising from the transfer of a long term capital asset, (being the original asset) is invested in the specified bonds within six months from the date of such transfer. No exemption will be available if the said amount is not invested within six months, whether it is under section 139(1) or under section 139(4).

The writer is founder of RSM Astute Consulting Group

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