Capital gain sop capped

QA person had got long term capital gains of ` 1.2 crore in January. If he invests ` 50 lakh out of ` 1.2 crore in March, the rest will get exposed to tax and will not be available for investment in schemes mentioned in Section 54EC. So can he invest ` 50 lakh in the new financial year but before the end of 6 months from the date of transfer? BHARGAV Hyderabad

A) According to Section 54EC, “Where the capital gain arises from the transfer of a long- term capital asset and the assessee has, at any time within a period of six months after the date of such transfer or sale of the original asset, invested the whole or any part of capital gain in the long term specified asset, provided that the investment made on or after 1st April 2007 in the long term specified asset by an assessee during any financial year does not exceed ` 50 lakh.”

From assessment year 2015- 16 onwards, the exemption under Section 54EC has been restricted. The government has capped the maximum investment in capital bonds to ` 50 lakh whether such investment is made during the relevant previous year or the subsequent previous year or both. Therefore, in this case, the exemption under Section 54EC is limited to ` 50 lakh, as the investment made in the month of March.

QI am a divorcee. As a part of settlement with my erstwhile wife, 30 per cent of my salary is being paid to her as per court order. My employer has been directed to deduct 30 per cent from my salary and remit the same to her. Will I be taxed in respect of this sum of 30 per cent of my salary also, which I am not getting at all? RAHUL MEHRA Bengaluru

A) You shall not be eligible to claim any deduction on account of maintenance paid to your erstwhile wife. The amount paid to her on your behalf will be taxed in your hands. The sum that is deducted and paid out of your salary can only be treated as an application of income.