Capital Gains Deposit in Capital Gains Account Scheme After Expiry of Period Prescribed Under Section 139(1) But Before Date Prescribed in Section 139(4)Whether Exemption Under Section 54F Still Allowable

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The Tax Publishers Income Tax--Capital Gains Deposit in Capital Gains Account Scheme After Expiry of Period Prescribed Under Section 139(1) But Before Date Prescribed in Section 139(4)--Whether Exemption Under Section 54F Still Allowable Pawan Prakash Section 54F provides for exemption in respect of capital gain arising from the transfer of any long-term capital asset other than the residential house if certain conditions are satisfied. If the assessee does not acquire new asset then he can deposit the amount of net consideration in an account opened under the Capital Gains Accounts Scheme, 1988, before the due date for furnishing return of income. A question arises what if the assessee does not deposit the amount of net consideration in Capital Gains Accounts Scheme, 1988, within the due date mentioned under Section 139(1). The Courts/Tribunal so far have held the period prescribed under Section 139(1) includes the extended period mentioned under Section 139(4). The learned author discusses the issue with the help of decided cases. 1. Scheme of Section 54F Section 54F provides for exemption in respect of capital gain arising from the transfer of any long-term capital asset other than the residential house if the net consideration arising from such transfer is invested in the purchase or construction of a residential house. On the date of transfer the assessee shall not own more than one residential house and further shall not purchase any residential house, other than the new one, within one year after the date of transfer of original asset or construct a new house other than the new one, within a period of three years after the date of transfer of original asset. The exemption will be waived if the new asset is transferred within 3 years of the date of purchase/construction. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

Income Tax--Capital Gains

Deposit in Capital Gains Account Scheme After Expiry of Period Prescribed Under Section 139(1) But Before Date Prescribed in Section 139(4)--Whether Exemption Under Section 54F Still Allowable

Pawan Prakash

Section 54F provides for exemption in respect of capital gain arising from the transfer of any long-term capital asset other than the residential house if certain conditions are satisfied. If the assessee does not acquire new asset then he can deposit the amount of net consideration in an account opened under the Capital Gains Accounts Scheme, 1988, before the due date for furnishing return of income. A question arises what if the assessee does not deposit the amount of net consideration in Capital Gains Accounts Scheme, 1988, within the due date mentioned under Section 139(1). The Courts/Tribunal so far have held the period prescribed under Section 139(1) includes the extended period mentioned under Section 139(4). The learned author discusses the issue with the help of decided cases.

1. Scheme of Section 54F

Section 54F provides for exemption in respect of capital gain arising from the transfer of any long-term capital asset other than the residential house if the net consideration arising from such transfer is invested in the purchase or construction of a residential house. On the date of transfer the assessee shall not own more than one residential house and further shall not purchase any residential house, other than the new one, within one year after the date of transfer of original asset or construct a new house other than the new one, within a period of three years after the date of transfer of original asset. The exemption will be waived if the new asset is transferred within 3 years of the date of purchase/construction.