Dilip Lakhani, Senior Chartered Accountant, answers queries from our readers on income tax and other levies.You have availed the deduction under Section 54F of the Income Tax Act, 1961, by investing into residential unit at the time when you have transferred the land which is treated as capital asset. The capital gains earned by you on transfer of land was Rs 20 lakh and the deduction is claim to the extent of Rs 20 lakh, even though the investment was made at Rs 1.75 crore. You can avail the deduction under Section 54, in respect of transfer of your existing residential unit where the long terms capital gains will be Rs 80 lakh. The investments in the new residential unit amounting to Rs 1.75 crore will cover the eligibility of the deduction under Section 54F and 54. In the event the AO does not accept your claim, then the appellate authority will definitely accept your claim and grant you relief.Please send your queries on Stocks to et.stocks@timesgroup.com; Mutual Funds to et.mfs@timesgroup.com Tax to et.tax@timesgroup.com Insurance to et.insurance@timesgroup.com Realty to et.realty@timesgroup.com

Source: Economic Times October 06, 2017 04:52 UTC