capital gains calculation and net consideration

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My wife bought a piece of land in 2004 for 3.6 lakhs and sold it for 30 lakhs a couple of months back. Does she have to invest the entire 30 lakhs in REC bonds or can she deduct the 3.6 lakh (which she had paid for the land in 2004) + the indexation amount and buy the REC bonds for a smaller amount?

1 Answers

As your wife sold land, as per section 54F, whole sale consideration (30 lakhs) has to be invested into a new residential property or capital gain bonds (section 54EC).

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