Skip to main content

TAX PLANNING With Respect To Long Term Capital Gain (Income Tax) - Investing in Specified Bonds

Long Term Capital Gain:

If an asset was held for more than one year, then sold for a gain, is a Long Term Capital Gain(LTCG) includes conversion of capital asset into stock in trade.

Tax Rate:

Taxed at the rate of 20%.

Scheme:

Income tax act allows deduction in respect of LTCGs if invested in Long Term Specified Assets


Long Term Specified Assets:

Any bond issued by

  • National Highway Authority of  India
  • Rural Electrification Corporation Limited

Quantum of Deduction:

  • Case 1: If the amount invested in specified asset >= Capital gain then entire capital gain is exempt
  • Case 2: If the amount invested in specified asset < Capital gain then to the extent of amount invested
  • Maximum to the extent of Rs 50 Lacs

Conditions For Availing Exemption:

  • The investment has to be made within a period of 6 months from the end of the month in which the transfer takes place.
  • The specified asset should not be transfered within a period of 3 years from the date of investment

Consequences of Conversion/transfer of new assets (before 3 years):

  • Shall be treated as income of the year in which it is transfered and charged to capital gain tax.
  • Taking loan/advance against the security of the new asset would amount to conversion of new asset into money.


Compiled By 

R.JEYARAJAN FCA.,
Mobile: 9943362200
Mail id: ca.rjr@hotmail.com

Labels:
Location: Thoothukudi, Tamil Nadu, India

Comments

Post a Comment

Popular posts from this blog

PRESS RELEASE 38TH GST COUNCIL MEETING - GST RATES CHANGES

GST Council in the 38th meeting held on 18th December, 2019 at New Delhi took following decisions relating to changes in GST rates, exemptions, - 1. To exempt upfront amount payable for long term lease of industrial/ financial infrastructure plots by an entity having 20% or more ownership of Central or State Government. Presently, the exemption is available to an entity having 50% or more ownership of Central or State Government. This change shall become effective from 1st January, 2020. 2. To levy a single rate of GST @ 28% on both State run and State authorized lottery. This change shall become effective from 1st March, 2020. 3. The Council also considered the rate of GST rate on Woven and Non-Woven Bags and sacks of polyethylene or polypropylene strips or the like , whether or not laminated, of a kind used for packing of goods ( HS code 3923/6305) in view of the requests received post the changes recommended on such goods in last meeting and recommended to raise the GST to a ...
Post a Comment
Read more

UNDERSTANDING YOUR CIBIL SCORE

What is the CIBIL Score? The CIBIL Score is a 3 digit numeric summary of your credit history. The Score is derived by using the details found in the “Accounts” and “Enquirers” sections on your Credit Information Report (CIR) and ranges from 300 to 900. The closer your Score is to 900, the more favorably your loan application will be viewed by a credit institution. The Score plays a critical role in the loan approval process. What does my score Mean? The score tells a credit institution how likely you are to pay back your loan based on your past pattern of credit usage and loan repayment behavior. The closer you are to 900, the more confidence the credit institution will have in your ability to repay the loan and hence better the chances of your application getting approved. What are the major factors that affect my score? There are 4 (Four) major factors that affect your score. These are described below. Late Payment or Defaults in the Recent Past: Your Payment hi...
Post a Comment
Read more

PRESS RELEASE OF 38TH GST COUNCIL MEETING

In the 38th Meeting of the GST Council held on 18.12.2019, the GST council recommended the following: 1. Grievance Redressal Committees (GRC) will be constituted at Zonal /state level with both CGST and SGST officiers and including representatives of trade and industry and other GST stakeholders ( GST practioners and GSTN etc.). these committees will address grievances of soecific /general nature of taxpayers at Zonal/state level. 2. Due date for annual return in FORM GSTR-9 and reconcillation statement in FORM GSTR-9C for F.Y 2017-18 to be extended to 31.01.2020 3. Following measures would be taken to improve filing of FORM GSTR-1 (i) waiver of late fees to be given to all taxpayers in respect of all pending FORM GSTR-1 from July 2017 to November 2019 if the same are filed by 10.01.2020 (ii) E Way Bill  for taxpayers who have not filed their FORM GSTR-1 for two tax periods shall be blocked. 4. Input tax credit to the recipient in respect of invoices or debit notes that ...
Post a Comment
Read more