Recently I have received this comment on blog post
So from the above we can say that if one can invest balance amount after payment of tax in such a way so that annual rate of return is more than 14.39%@ CAGR then it is beneficial to pay tax at one go as compare to investment in capital gain Bond otherwise he should invest in Capital gain bond and take benefit u/s 54EC .Though the rate of interest offered on capital gain Bond is just 5.75% but (IRR) will come as 14.39(CAGR) due to out go of log term capital gain tax in first year @20 % plus surcharge on log term capital gain.
Now specific answer to his query
- Non eligible for section 54:section 54 is available only if log term asset sold is a residentila house property ,so Gisrish has correctly said that sec 54 is not vailable to him,as he has sold land not a residential house property.
- Non eligible for section 54F:undersection 54F ,person can avail relief from paying long term capital gain tax arises on sale of long term capital asset,if he invest net sale consideration in a house in specefied time ,but he should not own more than one house at the time of transfer of long term asset other than purchased under this section(new house).In this Case Girish owned a house on the date of transfer of the property (land) so he is not correct and eligible for section 54 F
- Capital gain with or without indexation:For sale of land there is no option for calculation of tax without indexation and pay tax at lower rate.
- Tax calculation:
Read more: http://www.simpletaxindia.org/2008/10/capital-gain-bond-us-54ec-vs-capital.html#ixzz0gLjSyl2k
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