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Amendment in existing provisions
from Taxmann's Budget Marathon | Capital Gains | Suvira Agarwal – Partner | Grant Thornton Bharat
by Taxmann
Capital gains deduction on residential property
• The existing provisions allow deduction/ relief from long term capital gains without any monetary limit to individuals and HUFs on reinvestment in a new residential property – [Section 54/ 54F]
• The primary objective of the tax incentive was to mitigate the shortage of housing and promote construction of residential property.
• It has been proposed to limit the roll-over benefit and cap the deduction at INR 10 crores. Consequentially, it has been proposed that the provisions relating to deposit in Capital Gains Account Scheme shall apply only to capital gains/ net consideration up to INR 10 crores.
Cost of Acquisition/ Improvement of self-generated intangible assets and rights
• Cost of acquisition of other self generated intangible assets or rights has been a matter of litigation.
• It has been proposed to provide that cost of acquisition/ improvement of self-generated intangible assets and rights is to be considered as ‘Nil’ while computing capital gains on their disposal.
