Online edition of India's National Newspaper

Saturday, Jun 05, 2004

About Us
Contact Us
Property Plus Chennai
Published on Saturdays
Features: Magazine | Literary Review | Life | Metro Plus | Open Page
| Education Plus | Book Review | Business | SciTech | Entertainment
| Young World | Property Plus | Quest | Folio |
Property Plus Chennai
CASHWISE
Sections 54 and 54F - a comparison
T.M. AADITIYAN
THERE are many similarities as well as differences between Section
54 and Section 54 F of the Income Tax Act 1956. This is why a
comparison between the two sections is useful. In the earlier issues,
we had seen the comparison by way of examples.
Now, we will look at it in a tabular format :
No. Particulars Section 54 Section 54F
1. Asset transferred
Residential House
property
Transfer of a long
term capital Asset
not being a
residential house
2.
Type of Capital gain to
claim exemption
Long term
3.
In what asset should
the investment be
made
Residential House Property
4. How to invest Purchase or construction
5.
Time limit for
construction
3 years from the date of transfer
6.
Time limit for
purchase
1 year before transfer or 2 years after
transfer
7. Amount of exemption
Amount of
investment.
Amount of
investment *
Capital gains
Net consideration
8.
Under which situation
there will be no tax on
capital gain
When the
invesment is
equal or great
than the amount
of capital gain
When the
investment is equal
or greater than the
amount of Net
consideration
9.
If the amount is not
invested before the
date
of filing return, what
should be done?
Deposit in a Capital Gain Deposit
Scheme in any specified Bank and
enclose the proof of such
deposit with the return of income. (See
Note 1)
10.
What is the
consequence if the full
deposit is not utilised?
The amount will be taxable in the year
of default. (Either if there is withdrawal
and the amount is not utilized or at the
end of three years of transfer and there
is no purchase or construction)
Archives
Datewise
News
News Update
Front Page
National
States:
Tamil Nadu
Andhra Pradesh
Karnataka
Kerala
New Delhi
Other States
International
Opinion
Business
Sport
Miscellaneous
Index
The Hindu : Sections 54 and 54F - a comparison http://www.hindu.com/pp/2004/06/05/stories/2004060500340700.htm
1 of 2 6/15/2014 8:41 PM
11.
Can the person hold
any other house
property on the date
of transfer other than
the
exempted asset (due
to purchase one year
before the date of
transfer)?
Yes. The person
can hold any
number of house
property on the
date of transfer.
No. The person can
hold only one house
property other than
the new exempted
asset, otherwise he
cannot claim
exemption u/s 54F
12.
Can the person
purchase a new house
property within 1 year
from the date of
transfer or constructs
a new house property
from 3 years from
date of transfer other
than the exempted
asset?
Yes
No. If he does so,
he will lose the
exemption and he
will be taxed in the
year in which new
asset is purchased
or constructed for
the exempted
amount as long
term capital gain.
13.
What is the
consequence if the
exempted house
property is transferred
within
three years of
acquisition?
The amount of
capital gain
exempted from
tax on the original
asset will be
reduced from the
cost of acquisition
of the new asset
The amount of
capital gain which
is claimed
exempted will be
taxed as such
in the year in which
transfer takes
place.
14.
Nature of capital gain
in case of the above
default.
Short term Capital
gain
Long term Capital
gain.
Note: The unutilised deposit amount under the Capital Gains
Account Scheme, 1988, in the case of an individual who dies before
the expiry of the stipulated period cannot be taxed in the hands of
the deceased. This amount is not taxable in the hands of legal heirs
also, as the unutilised portion of the deposit does not partake the
character of income in their hands but is only a part of the estate
devolving upon them Circular No. 743, dated 6-5-1996.
This issue along with the discussions on Section 54 & 54F in the last
two issues, will give a comprehensive understanding of these two
sections, their similarities and differences.
(The author is Partner, T.M. Aaditiyaa & Co, Chartered Accountants,
Chennai.)
Feedback to propertyplus@thehindu.co.in
Printer friendly page
Send this article to Friends by E-Mail
Property Plus Chennai
Features: Magazine | Literary Review | Life | Metro Plus | Open Page
| Education Plus | Book Review | Business | SciTech | Entertainment
| Young World | Property Plus | Quest | Folio |
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | The Sportstar | Frontline | The Hindu eBooks | Home |
Comments to : thehindu@vsnl.com Copyright 2004, The Hindu
Republication or redissemination of the contents of this screen are expressly prohibited without the written
consent of The Hindu
The Hindu : Sections 54 and 54F - a comparison http://www.hindu.com/pp/2004/06/05/stories/2004060500340700.htm
2 of 2 6/15/2014 8:41 PM