Capital Gains Tax Questions

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  1. Rajive

    Rajive New Member

    Dear Sirs,

    A person is selling a property fo INR 1 crore out of which he has Capital Gains of INR 70 lakhs accruing in the current year. To save capital gains tax he plans to invest INR 50 lakhs in specified bonds under Section 54 and keep the balance INR 20 lakhs in a specified account for investment in another residential property after a period of 2 years.

    With respect to this I have the following questions:
    1. Is the understanding correct that if the above is done then the person will not have to pay any capital gains tax for this year?
    2. What are specified investments under Section 54 in which this money can be invested and how does one go about doing it.
    3. What is the nature of specified account in which the balance amount of INR 20 lakhs can be deposited? In what name does it need to be opened and where?

    Request your help to answer the above.

    Best Rgds,
  2. rudrabose

    rudrabose Active Member

    Dear sir

    1. Your understanding of the concept is 100% correct.

    2. Bonds of NHAI and REC are the specified instruments in which investment is to be made to claim exemption under section 54EC. For more details on features of these bonds, kindly refer -

    3. The 20 lakhs should be invested in the capital gains account scheme to be opened in the name of the person who has sold the property. For more details on features of capital gains account scheme, kindly refer -
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