Amount to be invested u/s54F for LTCG exemption

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Saurabh Jewrajka (Querist)

02 August 2016 Dear Sir/Madam, What amount shall be invested u/s 54F for LTCG exemption in the following case- a) where Sale proceed received is less than the Stamp/Market Value. Say, Sale proceed recd is Rs 25, Market Value is Rs 40 and Indexec COA is Rs 4. What amount shall be invested u/s 54F to claim full LTCG exemption. Please help me with this query and oblige. Thanks in advance. Regards, CA. Saurabh Jewrajka

Amol S Joglekar

Amol S Joglekar (Expert)

02 August 2016 (In the case of land or building, stamp value shall be considered as full value of consideration)
So invest 40 lakh to avail full exemption.

Saurabh Jewrajka

Saurabh Jewrajka (Querist)

02 August 2016 Full Value of consideration is deemed to be the stamp value u/s 50C ( deeming provision) for calculating LTCG. But nothing is mentioned u/s 54F for full value of consideration except the actual Sale consideration received. Whether Section 50C shall apply to section 54F too? Is not Section 50C a special provision which shall not effect other provision unless otherwise mentioned?

Amol S Joglekar

Amol S Joglekar (Expert)

03 August 2016 54F talks about the exemption and its computation.The word used is NET CONSIDERATION
it gives the same % of exemption as the capital gain bears to the NET consideration.
And 50C talks about full value of consideration with respect to section 48, please note.

Z (Expert)

03 August 2016 You should invest that amount which is deemed as consideration u/s 50C.
From that amount, you may reduce the cost of transfer so as to bring it at par with the wording of S.54F.
There are a few judgements also in this regards, there no need to worry.
To be on even more safer side, one may decide to not to deduct the cost of transfer and deposit/invest the consideration as per S.50C

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