Budget 2014: Scope of planning for tax liability from ‘capital gains’ reduced
In the Budget 2014, which was presented by Union Finance Minister Arun Jaitley on Thursday, scope of planning for tax liability arising out of ‘capital gains’ – that is, profits on sale of assets like real estate, gold, or shares – has been reduced. In addition, some evident loopholes in the system have also been plugged.
So far as claiming a tax emption is concerned, the government has capped the investment of proceeds from selling a house to only one new residential property; and has also mooted a ceiling on investment in bonds.
Since the earlier provision allowing gains from selling assets to be parked in government bonds, like those issued by National Highway Authority of India (NHAI) or Rural Electricity Corporation, an investment of up to Rs 50 lakh could be made in one financial year.
However, the government has now removed the words ‘Rs 50 lakh in one financial year.’
In reference to the move, chartered accountant Naresh Jhakotia – who is associated with the tax form of Vidarbha Industries Association – said: “Earlier if the gains were booked sometime in March bonds worth Rs 50 lakh were purchased within March 31 and that of another amount soon after March 31. This helped them gain a tax benefit in two years. Now it clearly caps the amount to Rs 50 lakh doing away with the lines one financial year.”
Source- The Times of India
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