Yes you can avail the same
Capital gain tax exemption
I have sale proceeds from a pvt ltd company share sale amounting to Rs.50lacs. In the same year I have sold a land wherein the Capital Gain is Rs.46lacs. I donot own any residential property as of now. Can I invest the above sum of Rs.50lacs+Rs.46lacs in buying of a new residential property whose value is Rs.98lacs. Can I avail exemption under section 54 &54F aggregated to buy one property.
Asked 6 years ago in Taxation
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8 Answers
If the above is not permitted then can I buy two flats against each,since I donot have any residential property as of now. Will Capital gain tax exemption be permitted.
Asked 6 years ago
Propose the best option to avail LTCGT exemption on sale of both the Long term assets
Asked 6 years ago
You can avail exemtion under section 54F only.
Under 54F investment in one residential property is allowed and not two.
After budget 2019 investment in two residential property is allowed under sec 54 only.
No change in Sec 54F.
Request to clarify whether I can avail 54 & 54F exemptions for buying the new flat,since I need the proceeds of both to support this investment on flat.
Asked 6 years ago
You can buy either new or resale residential property, or even you can construct a new one in India.
Yes you can
The definition of capital assets is provided under section 2(14) of the Income Tax Act, 1961. Capital assets, on the basis of time period of ownership, are divided into two different categories i.e. Long term capital assets and short term capital assets
As per provisions of section 54F of the Income Tax Act, 1961, exemption of capital gain is available in case of transfer of long term capital assets against investment in residential house. The salient features for availing exemption under section 54F are detailed hereunder –
- The exemption under section 54F is available only to individual and HUF;
- Capital gain has arisen on account of transfer of any long term capital assets other than residential house;
- Net consideration arisen on account of transfer of long term capital assets has been invested as follows –
Net consideration has been re-invested in purchase of one residential house within a period of 1 year before the date of transfer or within a period of 2 years after the date of transfer;
Following are the circumstances under which exemption is not available under section 54F of the Income Tax Act, 1961 –
- The assessee owns more than 1 residential house property as on the date of transfer of the original assets. However the residential house property bought for claiming exemption under section 54F is exempted from the same.
- The assessee purchases additional residential house within a period of one year from the date of transfer of original asset. The new asset purchased for claiming exemption under section 54F is exempted from the same.
- The assessee constructs additional residential house within a period of three year from the date of transfer of original asset. The new asset constructed for claiming exemption under section 54F is exempted from the same.
You may go through my previous posts for clarification to this question.
Yes you can avail the benefits under section 54F as desired.
In case full amount of net consideration is invested in purchase / construction of residential house, then, the full amount of long term capital gain would be exempted under section 54F.
In case where only part of the net consideration is invested in purchase / construction of residential house, then, only proportionate amount of long term capital gain would be exempted under section 54F. Proportionate amount of exemption can be calculated on the basis of following formula –
Exemption under section 54F = Long term capital gain x Amount re-invested / Net consideration