54 F disallowance presentation in ITR 2
This query is : Resolved
Quick Summary
29 July 2025
I have gone thru ITR 2 of fy 24-25, but am unable to know how to present the 54 F ( equity ) disallowance of previous fy 23-24 in ITR 2 in fy 24-25 since I will also be claiming both 54 F (equity) and 54 benefits in the current Fy24-25. I have checked with a few CA friends, but have not received any clear reply.
12 August 2025
How to show 54F disallowance in ITR-2 for FY 24-25?
Identify the disallowed amount of exemption from FY 23-24 (earlier year when exemption was claimed but not complied fully).
Include the disallowed amount in Capital Gains of FY 24-25:
Report the disallowed exemption as ‘Shortfall in investment under section 54F’ as part of your Capital Gains income in Schedule CG.
This essentially means the previously exempt capital gain (or part of it) is now taxable in FY 24-25.
Claiming new exemptions under Sections 54 and 54F for FY 24-25:
You can still claim fresh exemptions for new capital gains arising in FY 24-25 by properly reporting the investments made in the current year.
These exemptions go in the same Schedule CG but relate to different capital gains transactions.
Where exactly in ITR-2?
Go to Schedule CG - Capital Gains →
Under "Long Term Capital Gains", fill in:
Sale consideration, cost of acquisition, etc., for the current year.
Add the disallowed exemption amount as taxable capital gain from earlier year as a separate entry or in the appropriate column for disallowed exemption (there may be a specific row for "amount taxable due to non-compliance of 54F" depending on the utility you are using).
You can also add notes for clarity in the ITR utility if allowed.
Important Points:
The disallowance amount is taxed as capital gains in FY 24-25 and not as income from other sources.
Keep supporting documents of previous year exemption claim and proof of non-compliance (if any).
When claiming new exemptions, ensure they relate to capital gains earned in FY 24-25 and investment proof is ready.
Identify the disallowed amount of exemption from FY 23-24 (earlier year when exemption was claimed but not complied fully).
Include the disallowed amount in Capital Gains of FY 24-25:
Report the disallowed exemption as ‘Shortfall in investment under section 54F’ as part of your Capital Gains income in Schedule CG.
This essentially means the previously exempt capital gain (or part of it) is now taxable in FY 24-25.
Claiming new exemptions under Sections 54 and 54F for FY 24-25:
You can still claim fresh exemptions for new capital gains arising in FY 24-25 by properly reporting the investments made in the current year.
These exemptions go in the same Schedule CG but relate to different capital gains transactions.
Where exactly in ITR-2?
Go to Schedule CG - Capital Gains →
Under "Long Term Capital Gains", fill in:
Sale consideration, cost of acquisition, etc., for the current year.
Add the disallowed exemption amount as taxable capital gain from earlier year as a separate entry or in the appropriate column for disallowed exemption (there may be a specific row for "amount taxable due to non-compliance of 54F" depending on the utility you are using).
You can also add notes for clarity in the ITR utility if allowed.
Important Points:
The disallowance amount is taxed as capital gains in FY 24-25 and not as income from other sources.
Keep supporting documents of previous year exemption claim and proof of non-compliance (if any).
When claiming new exemptions, ensure they relate to capital gains earned in FY 24-25 and investment proof is ready.
12 August 2025
Tried everything. Still not getting desired results. If I can know the exact items numbers in each schedule and what numbers to enter in each,it will help
10 May 2026
In Schedule CG, locate the row for "Amount deemed to be Long Term Capital Gains" under the LTCG section. Enter the disallowed amount there as a standalone figure. This treats the failed investment as "deemed gain" for the current financial year without needing to re-enter the original sale price or costs.
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