LTCG buy second proprty

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This discussion clarifies whether an individual can claim exemption from Long Term Capital Gains (LTCG) tax on mutual fund sales by purchasing a second property. The guidance confirms that exemption under Section 54F of the Income Tax Act is indeed available, even when buying a second house, provided the individual does not own more than one other house property at the time of purchase.

Ravi

Ravi (Querist)

28 March 2023 How to avail exemption of LTCG tax :

The assessee wants to sell 5 years old mutual fund from which the gain would be approximately 7 lacs. He is already having one house property and now he intends to buy another property out of sell amount of mutual fund.

Can he save LTCG in above by purchasing the second house property ? Kindly guide

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

28 March 2023 Yes, eligible to claim exemption u/s. 54F of IT act.

Ravi

Ravi (Querist)

28 March 2023 Sir, thanks for propmt guidence.

Just to re-confirm, this will be his second house property which will be purchased from sell amount of mutual fund.
Still the exemption is allowed ?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

28 March 2023 Yes, it is allowed. The exemption is allowed if you 'do not have more than one house property other than the one being purchased.' It means for purchase of SECOND House property exemption u/s. 54F can be claimed.

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