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Benefit of sec. 54f on ltcg on sale of commercial property

SSG (1936 Points)

17 July 2017

An assessee has long term capital gain of Rs. 2 lacs from sale of commercial property in FY 2016-17. Can she take benefit under Sec. 54F or any other section for saving the LTCG? Please advise.

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7 Replies

upasana gupta (Finance Professional) (3931 Points)
Replied 17 July 2017

Yes you can take adavantage of section 54F if you follow the provision of the section which is:

(i) The assessee is only an individual or a H.U.F.

(ii) The assessee does not own more than one residential house on the date of transfer of the above mentioned assets.

(iii) The assessee transfers above mentioned asset or assets (other than a residential building) and there is a long term capital gain.

(iv) The assessee invests the net sale consideration of above mentioned assets to construct a residential house within 3 year of the sale of the asset or purchases an already built house within one year before or two years after the sale of the above mentioned asset.

(v) The assessee is required not to purchase another residential house with in a period of one year after or constructs within a period of 3 year after the date of transfer of the above mentioned asset/assets.

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160322 Points)
Replied 18 July 2017

For such small amount of capital gain......... section 54EC would be more advisable !!! (provided 6 months not passed)

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Samdeesh Kochhar (33 Points)
Replied 18 July 2017

also in 54 F you will be required to invest whole of the sales consideration rather than capital gain only in order to get the full exemption otherwise your exemption will get proprtionately reduced...
Hence 54EC is the best possible alternative

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SSG (1936 Points)
Replied 18 July 2017

The shop was sold in July 2016. Now can she acquire new residential plot before 31st July or deposit in Capital Gain Scheme for claiming benefit under 54F?

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160322 Points)
Replied 18 July 2017

Residential plot............ only if she wishes to construct house property within next 2 years now (1 year almost lapsed)............. otherwise purchase of house property within next one year.

All the amount of sell proceeds (when she wishes to get exemption u/s. 54) minus whatever invested (like the plot) is to be deposited in 'CGAS-1988' account before filling the return of AY 2017-18

SSG (1936 Points)
Replied 18 July 2017

Does department has any check on completion of the construction of house? Do we need to submit completion certificate or any other doc. after 2 years, alongwith the ITR. Please advise.

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160322 Points)
Replied 18 July 2017

In General no check...... No liability to submit CC madatorily............ but that is a theft........ likely to be caught and fined..... In case of any scrutiny (can be opened for next six years) ..............

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