Capital gain exemption under section 54F

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This discussion clarifies the eligibility for capital gains exemption under Section 54F. The assessee has a significant capital gain from mutual funds and has purchased a new house. However, they own two other residential properties: one they reside in and another owned in their name but used by a partnership firm. Crucially, Section 54F requires the taxpayer not to own more than one residential house property (apart from the new one) on the sale date. Since the property used by the firm is in the assessee's name, it counts as a second property, making them ineligible for the exemption, even if used for commercial purposes.

urvashi kareliya

urvashi kareliya (Querist)

08 October 2025 HII!!!
assesse has capital gain of RS. 5.5 CR in mutual fund, sale consideration of RS. 18CR .
1. assessee has purchase house property of 11CR, by taking loan of RS. 8CR
2. assess has one residential property where she is residing.
assess has another residential property which is use by the partnership firm where assessee is the partner.
no other property other than above own by assessee.

can assess claim exemption under section 54F???

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

08 October 2025 Whether the property used by Partnership firm is in her name?

urvashi kareliya

urvashi kareliya (Querist)

08 October 2025 yes, it is in the name of assessee

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

08 October 2025 In that case the condition of sec. 54F is not satisfied... (On the date of sale, the taxpayer should not own more than one residential house property apart from the new one being acquired.)
As such she is not eligible for the exemption u/s. 54F......

urvashi kareliya

urvashi kareliya (Querist)

09 October 2025 what if that residential property use for commercial purpose ?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

09 October 2025 No exemption for that, it retains the status of HP in the act.

urvashi kareliya

urvashi kareliya (Querist)

09 October 2025 thank you so much for the clarity

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

09 October 2025 You are welcome.