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Mr X and Mrs X(husband and wife) are holding shares in a company(unlisted)  from 1980 onwards. The company is having only house property. They are holding alongwith other shareholders. They have invested 1 lac and 2 lac respectively in the company.

Because of appreciation in the real estate prices they are selling their shares to 1 crore and 2 crores respectively to other share holders.

Mr x is not having any residential house and Mrs X is having one residential house

Query:

a)This is a long term capital gain whether X has to pay capital gains tax on 99 lac and Mrx has to pay capital gains tax on 198 lacs at 20%

b)With the consideration Mr x and  Mrs x wants to buy property jointly only one flat -Can they claim 54F deduction

c)till the  purchase the amount has to be deposited in capital gains accounts scheme in a bank? Is it necessary to keep separately in the bank

Pl advice

Joseph David

For the Accounting year 2008-09-in books of accounts of ABC Ltd  there is a business loss of Rs. 1211 lacs and Depreciation loss of Rs. 1537 lacs and the total Net loss is Rs. 2748 lacs. In the same year ABC Ltd has  deferred tax asset of Rs 884 lacs. Net loss after taxation for the year is 1876 lacs. This is adjusted against surplus brought forward from previous year of  Rs. 245 lacs and the balance is adjusted against General Reserve and surplus carried to balance sheet is shown as NIL.

For the Financial year 2009-10 ABC Ltd has Business Profit of 601 lacs and Depreciation loss of 1569 lacs. The net loss (after depreciation) also is adjusted against General Reserve and surplus carried to balance sheet is shown as NIL.

Query:
In the financial year 2010-11 ABC is expecting Net profit of 930 lacs-

As per 115JB Explanation 1 (iii) from the book profit we have to reduce:

The amount of loss brought forward or unabsorbed depreciation, whichever is less as per books of account –

a)As per books of accounts in the year 2008-09
Business loss            1211 lacs
Depreciation loss     1537 lacs
Lower of the two--   1211 lacs

b)As per books of accounts in the year 2009-10
Business Profit          601 lacs
Depreciation loss     1569  lacs
Lower of the two--     nil lacs


Can ABC deduct upto 930 lacs  against Net Profit of 930 lacs though ABC has adjusted in the year 2008-09 the net loss against general reserve and surplus brought forward from previous year-so that book profits will be NIL and taxable payable will be nil.