Query 1]

One of my relatives who is a Govt. employee, tax payer, purchased of plot in the year 1995 with a cost of Rs. 54,000/- and spent some money for boundary wall of Rs. 21,000/- (Total expenditure was Rs, 54,000/- + Rs. 21,000/- = Rs. 75,000/-). Now (2011), he has sold that plot with a cost of Rs. 15,00,000/-.

My questions are as follows:

  1. How much he has to pay the tax?
  2. If he invests the whole money in MIS, or some bonds, etc, still he has to pay tax?
  3. What are ways to avail the tax benefit?
  4. If he purchases a flat/plot with the sale proceeds of his plot, still he has to pay some tax?
  5. Is it called capital gain? I request you if you could guide something. []


  1. It is presume that
    a) The plot is purchase in the FY 1994-95.
    (If it is purchased in F.Y. 1995-96, “259” used below shall be replace by “281”)
    b) The Stamp duty valuation of the plot transferre is not exceeding Rs. 15 Lacs. (If the Stamp Duty valuation exceeds Rs. 15 Lacs, capital gain would be require to be computed by taking such higher value)
  2. Cost Inflation Index (CII) for the relevant F.Y. 1994-95 & F.Y. 2011-12 are “259” & “785” respectively.
  3. LTCG on sale of plot shall be Rs. 12.73 Lacs  [ i.e., Rs. 15 Lacs Less ( 0.75 Lacs * 785 / 259). Capital gain tax is payable @20%.
  4. Long Term Capital Gain arising on sale of plot can be saved by opting for an exemption u/s 54F and/or U/s 54EC.
    a) U/s 54F:
    For exemption u/s 54F, subject to various other terms / stipulations, your relative would be require to invest the amount of net sale consideration for purchase of a residential house property within a prescribe period. Exemption u/s 54F is available on the basis of net sale consideration investe (& not on the basis of LTCG earn). If entire net sale consideration is not investe, exemption will be available on proportionate basis.
    b) U/s 54EC:
    To save LTCG tax u/s 54EC, one has to invest the amount of Long Term Capital Gain (LTCG) within a period of 6 months from the date of sale/transfer of assets in the specified bonds issued by REC/NHAI.  There is a maximum ceiling of Rs. 50 Lacs in a financial year for investment in 54EC Bonds.
  5. There is no exemption if the capital gain or the sale proceeds is investe in the MIS or bonds other than 54EC Bonds mentioned above. The income arising on sale of capital assets (like plot, in the given case) is considere as capital gain income.

Query 2]
By profession, I am a Post Office agent. I do business every year & on the commission received, the post office deducts T.D.S. on regular basis. Now, I want to file my I.T return. For this, I have asked for T.D.S. certificate to the post office, but they have asked me to give the details of business done by me in the previous financial year. As far as my knowledge is concerned, maintaining of T.D.S. record is a part of the post office job. Kindly suggest me how can I file my return without getting the T.D.S. certificate? Kindly tell me the what kind of punishment and fines can be impose on post office for not maintaining T.D.S  on commission given to agents and for harassing for the same? Looking for your advice at the earliest.


The person deduct the tax at source is duty bound to:

  1. Deposit the tax deducted at source within prescribed time to the Government Treasury.
  2. File the Quarterly TDS return in respect of the Tax Deducted
  3. Issue the TDS Certificate to the Deductee within a prescribed time.

For non compliance of each and every part mentioned above, there is a separate penalty and consequences under the Income Tax Act-1961.

For non issuance of TDS Certificate within a prescribed time, penalty is imposable u/s 272A (2) @ Rs. 100/- per day during which the failure continues. However, the amount of penalty cannot exceed the amount of tax deductible/deducted.

For non filing of TDS Return also, there is a penalty provision of Rs 100 per day.

Without Quarterly TDS Return being file by the Deductor, you will not be entitle for the Tax Credit in respect of TDS done from payment make to you.

In your case, you should have been issue the TDS Certificate within the prescribe time by the Tax Deductor. However, there is a general grievance that in many cases the Tax Deductor do not issue TDS certificate despite the fact that many requests & reminders are given by the Deductees for such issue of certificates. In such cases, Deductee can follow the following approach:

  1. Write a letter to the Deductor incorporating:
    a] The details of payments done to you and the tax deducted there from.
    b] Provision of Section 203 which requires the Deductor for issue of tax certificate within one month from the date of tax deduction
  2. Keep the proof of letter issued to the Deductor
  3. If despite this, the certificate is not issue, write a letter to Joint Commissioner or Addle. CIT of TDS wing who has jurisdiction over the Deduct mentioning the detailed facts elaborated above.

You can also view all the tax deducted & deposited in your account [i.e. Tax Credit in Form No. 26AS] by registering your PAN at


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