Exemption u/s 54f

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This query is : Resolved

rajesh bapna (Querist)

16 August 2014 One land was sold by assessee in FY 2013-14. Prior to that before 10 months he purchased one residential flat by obtaining 85% home loan. At the time of calculating capital gain tax exemption u/s 54F was taken for that flat together with expenses incurred for massive furniture and finishing work after getting sale proceeds of land. The balance amt. kept by him. On the date of sale the flat was only residential house.

My query is as the flat is taken thru home loan. Can we avail exemption u/s 54F or not.

Nikhil Kaushik

Nikhil Kaushik (Expert)

16 August 2014 while 54F exemption should be available to you but I am not sure you can include expenditure on furniture in this.

rajesh bapna

rajesh bapna (Querist)

16 August 2014 Here furniture means fix nature furniture

Nikhil Kaushik

Nikhil Kaushik (Expert)

16 August 2014 furniture means furniture....in my view it is not part of the cost of the house.

CA UMESH DULAL

CA UMESH DULAL (Expert)

16 August 2014 If you have executed separate sale deed for housed and furniture, then sale proceed from furniture is not taxable as it is not capital assets.

If no separate deed is executed, then entire cost is to be taken as cost of house.

Rupesh Jain

Rupesh Jain (Expert)

16 August 2014 yes you can take the exemption u/s 54F

rajesh bapna

rajesh bapna (Querist)

16 August 2014 pl. confirm again, the assessee has invested in house prior to sale out of loan. and finally net consideration of sold assets has remained with him. Is this is case that net consideration of only that sold asset should be invested or prior investment can be made and assetssee have hold balance cash with him.

CA UMESH DULAL

CA UMESH DULAL (Expert)

16 August 2014 exemption is allowed if house is purchase within One year prior to transfer.