54F disallowance taxed at what rate

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This discussion centres on the applicable tax rate for a Section 54F disallowance on equity investments. The core question is whether the tax rate is determined by the original sale date of the asset or the date the exemption condition was broken. The user is seeking clarification on whether to apply the 10% or 12.50% tax rate, as their CA friends suggest 10% based on the original sale date being before July 23, 2024, while the condition was broken after this date.

narayan

narayan (Querist)
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25 August 2025 still confused .

for 54 f disallowance ( EQUITY ) of previous financial year , what is the rate of tax . is it based on the date of original transaction or the date on which the exemption was withdrawn ( the condition broken ).
the original sale date was 10/08/2023 ie before 23 july 2024 . The condition was broken on 18/11/2024 ie after 23 july 2024 .so what is the rate 10 % or 12.50 %

and how to subtsantiate this

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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25 August 2025 The rate applicable on the date of withdrawal.... 12.5%.

narayan

narayan (Querist)
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25 August 2025 But where does it say this that it is the date the condition was broken and not the date of original transaction . It says if sale was before 23 july 2024, it is 10 %. My CA Friends are saying it should be 10 %.. How to substantiate this ???.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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25 August 2025 Refer:: https://1finance.co.in/blog/how-to-save-capital-gains-tax-section-54f/

https://www.taxmann.com/research/income-tax/top-story/105010 six zeroes 14817/provisions-of-section-54f-have-to-be-complied-with-scrupulously-experts-opinion

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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21 September 2025 Good luck....

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