LTCG tax after selling property.

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  1. lalitkant

    lalitkant New Member

    Is it advisable to invest LTCG of property in 1)54 EC bonds ! or

    2) Mutual Funds or

    3) Any other better option available
     
  2. V K Khanna

    V K Khanna Active Member

    Investment of LTCG in mutual funds is not permissible to claim exemption from tax. You have a choice to invest in 54EC bonds or in a residential property and claim exemption under S 54 subject to fulfilment of certain conditions.

    If not interested in buying a residential property, you can consider investing in 54 EC bonds to save tax.
     
  3. Kamlesh Kakde

    Kamlesh Kakde New Member

    One of our client had sold his residential property at Rs. 20, 00,000/-, by that time government valuation of the said property was Rs. 27, 50,000/-.
    At the time of filing of income tax return, they had wrongly computed their capital gain by taking Rs. 20,00,000/- as the consideration value instead of Rs. 27,50,000/-.

    Now, he got income tax notice penalty for non-disclosure of income u/s. 274 ground of imposition of penalty.
    Can we request for non-charging of penalty, since the said mistake was committed unintentionally & client was not aware about the provisions of the Income Tax Act, 1961 & there was no intention to evade the tax.


    Do needful in this regard….
     
  4. V K Khanna

    V K Khanna Active Member

    If your client offers certain income to tax in his return of income which in fact is exempt from tax and your client does so unintentionally due to ignorance of Law and the Assessing Officer taking advantage of ignorance of the assessee, avoids giving any tax relief. In such a case the assessee's claim for relief is in accordance with the Law and gets support from the CBDT circular No 14 (XL-35) dated 11.4.1955 wherein it has been clearly stated that the officers of the Deptt must not take advantage of ignorance of the assessee as to his rights. Further, the circular says that it is the duty of the Deptt to assist the taxpayer in every reasonable way particularly in the matter of claiming and securing reliefs.

    Your client in the case under consideration is on the other side of the coin as he is not seeking relief but liable to tax which is legitimately due from him... He cannot plead ignorance about the law and have to follow the procedure as laid down under the Income Tax Act.
     
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