If the amount invested is more than or equal to the net consideration, then the entire capital gain.

If the amount invested is less than the net consideration, then the amount invested x capital gain / net consideration

No exemption can be claimed in respect of the repayment of the PF loan. The purchase of the land itself may qualify for the exemption provided a residential house is constructed on the land within three years from the date of sale of the property owned by you.

In this connection you may note that it has been clarified by the Board through Circular No. 667 of October 18, 1993, that if the amount of capital gain for the purposes of Section 54 or the net consideration for the purposes of Section 54F is used for purchasing a plot and also towards construction of a residential house thereon, the aggregate cost should be taken for determining the quantum of exemption under Sections 54/54F.

For this benefit to be available, the acquisition of the plot and also the construction thereon should be completed within the period specified in the sections.

Query

I have purchased a flat in Delhi and the same has been registered in my name. I have paid stamp duty and registration charges of Rs 1.67 lakh.

This was paid in May 2004. If I were to furnish proof of such payment of stamp duty and registration charges, can I get any tax benefits?

Antony

Reply

Stamp duty and registration charges will qualify for the rebate. Such rebate can be reduced from the tax of the assessee at the percentages given in Section 88. Under Section 88(2)(xv)(d), stamp duty, registration fees and other expenses for the purpose of transfer of such house property to the assessee will qualify for rebate.

You may note that if your gross total income exceeds Rs 5,00,000, no rebate can be claimed under Section 88. Gross total income will mean the income computed before allowing deductions under Sections 80CCC to 80U.

The maximum amount that will qualify for rebate will be Rs 20,000.

Query

For claiming exemption in respect of leave travel allowance (LTA), the Income-Tax Act requires that the journey should be performed by a national carrier. If I were to travel in any other carrier can I still claim the exemption in respect of the LTA?

Narayanan R.

Reply

You can claim the exemption under Section 10(5) in respect of the expenditure incurred on the travel subject to satisfying the other requirements of the section.

The exemption, however, has to be restricted to the economy fare charged by the national carrier and by the shortest route.

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