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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