Question: As talked about by you in your article, the Long Term Capital Gains (LTCG) arising out of sale of any capital asset aside from a residential home could be claimed as exempt below Section u/s 54F if the sale proceeds are invested in a residential home property, topic to the cut-off dates talked about therein. This part is silent as to what sort of Long Term Capital Assets are is envisaged when it says “the capital gain arises from the transfer of any long-term capital asset, not being a residential house ” I’ve a sizeable LTCG from debt mutual funds over the past monetary 12 months and likewise going to have the identical within the present monetary 12 months additionally. In view of the above, I’m eager to know if I can reinvest the LTCG earned from a debt fund in a residential flat throughout the subsequent 2 years. I additionally need to know if I can declare the refund for the tax paid on LTCG for the AY 2021-22 in future. – P. Acharya
Answer: For the aim of claiming exemption below Section 54F all of the capital belongings besides a residential home are lined, for which a separate exemption below Section 54 is accessible. So exemption for long run capital features on sale of all of the capital belongings together with debt funds could be claimed below Section 54F by investing in a residential home property inside specified cut-off dates.
Please observe that for the aim of claiming exemption from long run capital features on sale of a residential home property you’re required to speculate solely the quantity of capital features computed, after making use of the fee inflation index to the residential home property below Section 54 whereas for claiming exemption in respect of long run capital features arising on sale of any asset aside from a residential home property below Section 54F, you’re required to speculate not the quantity of the capital features however entire of the quantity of web sale consideration acquired. So in case you want to avail the exemption below Section 54F, you’ll have to make investments the redemption proceeds of the debt funds in a residential home property.
In case you have got already paid taxed in your long run capital features, there isn’t a provision below the regulation to assert a refund of such tax even for those who purchase a home throughout the specified time interval. However in case you’re planning to purchase/assemble a home property throughout the prescribed time restrict, you possibly can deposit, the quantity to be invested, in a checking account to be opened below Capital Gains Scheme Account with authorised financial institution and declare the exemption whereas submitting the ITR to be filed for evaluation 12 months 2021-2022. Even in case you have got already filed the ITR, you possibly can revise the ITR and declare the refund for those who deposit the quantity within the above account by thirtieth September 2021 the prolonged due date for submitting of ITR for monetary 12 months 2020-2021.
Balwant Jain is a tax and funding professional and could be reached on jainbalwant@gmail and @jainbalwant on Twitter
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