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Adjustment of Equity Capital Gain to buy Property (aprtment)

gk (service) (156 Points)

07 January 2023

Dear Experts,

I have bought this year an apartment costing nearly seventyfive lakhs and I have been used the money by selling my stocks holding in the year FY 2022-23. The total capital gain by selling is ninety lakhs. whether I could adjust this profit amount (fully or partly) in apartment cost? Please advise me.

Regards

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4 Replies

Manish (CA) (1076 Points)
Replied 07 January 2023

Yes, exemption u/s 54F is available.

So the facts are:

Received 90 lac from shares and used 75 lac out of it for buying a flat. And it is a long-term capital gain transaction.

First, you need to calculate the capital gain amount: 90 lac - the cost of buying those shares = LTCG.

While reporting this above LTCG in ITR, reduce exemption amount = LTCG x 75 / 90 = Exempt amount, and report the net taxable capital gain.

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gk (service) (156 Points)
Replied 08 January 2023

Thank you very much Manish ji for your lightning response. After reading your reply, I just gone through the 54f sections available in net.

The problem I did notice is that I have a house bought in 2017. But the house is not safe to stay (from the date of purchase) so that neither I could rent it or stay there. It is about to demolish. In that condition only I have decided to buy an apartment as mentioned in my initial query.

So at this scenario whether I could avail this exemption?

Eagerly waiting for your advise.

Thank you