exemption u/s 54F

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This query is : Resolved

sonu gupta (Querist)

14 July 2011 in case of 'A' who is having LTCG from two transaction and have LTCL from one transaction wants to avail the benefit of sec 54F. now,whether he can avail the benefit of sec54F in respect of both LTCG transaction or only one of them or benefit is restricted to NET LTCG after setting off LTCL.

U S Sharma

U S Sharma (Expert)

14 July 2011 details required for discussion

sonu gupta

sonu gupta (Querist)

14 July 2011 suppose 'A' earned 10 lac LTCG in one transaction,20 Lac in another transaction and loss of 25 lac in another transaction. now whether he can claim exemption u/s54F in respect of RS. 30lac gain earned in two transaction or exemption is restricted to only Rs.5 lac means net income under the haed capital gain

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

14 July 2011 First Compute taxable income under the head LTCG. Total LTCG is 30 Lacs.
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Next Step is to claim exemption U/s 54F. I take from myside it to 2200000/ which is taken on proportionate basis on Sales Considerations of the 2 properties sold.

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Taxable income from LTCG is 8.00 Lac, against that STCL loss will be set off.

sonu gupta

sonu gupta (Querist)

14 July 2011 loss of Rs 5 lac is also a long term capital loss.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

14 July 2011 1. Long term loss can be set off against long term gain.

2. Long term Capital Gain is calculated on
the basis of each capital asset.

Capital gain arising on Residential House
if computed then the taxable capital gains will be that part only which can not be set off for exemption U/s 54. If it is wholly set off Capital Gain will be Zero.

Let the same person has suffered a capital loss. Whether the loss can be set off or not, is governed by the provisions of set off and carried forward under a different chapter.

So in nut shell you can claim exemption first U/s 54, 54F etc and if there remains any balance CG that will be only available for setting off of the LTCL of a different capital asset.

You can not apply set off provisions prior
to computational provisions even with in the same head of income.

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