Exemption from long terms capital gains tax u/s 54f
This query is : Resolved
22 May 2012
Can exemption from long term capital gains tax under section 54F be availed if one already owns a house?
If a person sells a plot of vacant land, purchased over 3 years ago, and from the sale proceeds of the land, he proposes to purchase a flat so that he can avail exemption of long term capital gains tax under section 54F and if he already owns one flat(house property), can he still avail the tax exemption by purchasing a second house property? Is there any limit to the number of house properties one already owns, prior to the purchase of this new house property, in order to avail the tax exemption under discussion?
If a person sells a plot of vacant land, purchased over 3 years ago, and from the sale proceeds of the land, he proposes to purchase a flat so that he can avail exemption of long term capital gains tax under section 54F and if he already owns one flat(house property), can he still avail the tax exemption by purchasing a second house property? Is there any limit to the number of house properties one already owns, prior to the purchase of this new house property, in order to avail the tax exemption under discussion?
22 May 2012
Exemption u/s 54F is NOT available if the assessee:
(i) owns more than one residential house, other than the new asset, on the date of transfer of the original asset; or
(ii) purchases any residential house, other than the new asset, within a period of one year after the date of transfer of the original asset; or
(iii) constructs any residential house, other than the new asset, within a period of three years after the date of transfer of the original asset
Accordingly, if the assessee already owns a flat, he CANNOT avail exemption u/s 54F by investing in a new flat.
(i) owns more than one residential house, other than the new asset, on the date of transfer of the original asset; or
(ii) purchases any residential house, other than the new asset, within a period of one year after the date of transfer of the original asset; or
(iii) constructs any residential house, other than the new asset, within a period of three years after the date of transfer of the original asset
Accordingly, if the assessee already owns a flat, he CANNOT avail exemption u/s 54F by investing in a new flat.
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22 May 2012
as per 1st point assessee can buy one house for exemption as he is owning not more than one house on date of transfer, right?
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23 May 2012
Dear Sirs, if the assessee cannot avail tax exemption under section 54F, kindly advise what are the other avenues/ways to save tax.
23 May 2012
He can invest in specified bonds and claim exemption u/s 54EC.
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24 May 2012
Many thanks, Siddhartha!!
24 May 2012
You are welcome.
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