Long term capital gain on shares invested for purchases of flat ..

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This discussion clarifies whether long-term capital gains from selling shares can be used to claim tax exemption under Section 54F of the Income Tax Act when purchasing a new residential property. The consensus is that a 100% exemption is possible if the capital gain amount is reinvested in a new flat within the specified timeframes and conditions, even if the original investment was in shares.

K.G.Shah

K.G.Shah (Querist)
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27 July 2023 Hello Sir

I have one question .

Suppose Mr A had long term capital gain on shares of Rs. 15 lakhs . ( 40 lakh sales - 25 purchase cost ) .

If he had invested capital gain of Shares for purchases of new flat of Rs. 60 lakhs ..( 1/3 shares .. total cost of flat is 1.80 cr)
then

whether Mr A will get exemption u/s 54 F of income tax act. ?
Whether exemption of section 54 F is applicable for capital gain of shares ?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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27 July 2023 Yes, he can get 100% exemption u/s. 54F, when he invests Rs. 40 lakhs or more, within specified time, in purchase of new HP; subject to conditions specified under the section.

K.G.Shah

K.G.Shah (Querist)
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14 August 2023 Thanx for quick reply . I have benefited lot as my consultant was not aware and he says that u will not get benefit. Finally he agreed and I have saved tax.
Till date more then 15 quarries raised and all answer got quickly and. Correct. Thanx sir.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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14 August 2023 Most welcome.

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