LTCG offset against property buy

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This discussion explores offsetting Long Term Capital Gains (LTCG) from selling a flat and shares against the purchase of a new residential property. While exemptions under Sections 54 and 54F of the IT Act can be claimed simultaneously, it's crucial to note that Section 54F calculations are based on total sale proceeds, not just LTCG. This can lead to a partial tax liability if the investment doesn't fully cover the LTCG, and unused portions of the purchase price cannot be carried forward to offset future LTCG.

Proloy Samaradivakera

Proloy Samaradivakera (Querist)
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29 October 2025 I sold a flat where the LTCG is Rs 56,50,000/- (Sale Value 19125000 less CoA Rs 13475000). In the same financial year I sold shares and/ MF where the LTCG is Rs 15,00,000/-. Can I offset the LTCGs
of Rs 56,50,000 + Rs 15,00,000/- against the purchase of a residential flat bought at a price of Rs 1,70,00000/- and pay no LTCG tax?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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29 October 2025 You can claim exemption under both the section 54 & sec 54F IT act, simultaneously. But for exemption under sec 54F your calculation should be based on total sell proceed and not just LTCG. So there may arise some tax liability.

Proloy Samaradivakera

Proloy Samaradivakera (Querist)
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30 October 2025 Thanks for the clarification.
If my exemption from flat sale LTCG and Share sale sell proceeds together is 1 crore. I will be able to offset the LTCG tax against my new flat buy for Rs 1.7 Crores and I pay no tax. The 0.7 crores which is still left from the new flat buy - can I use this amount to offset LTCG in next financial year?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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30 October 2025 Let me clarify...
Your LTCG from flat is 56.50 L which can be claimed exempted u/s. 54 IT act, by investing Rs. 56.50 lakhs in new flat. But when you invest total sell proceeds (say sold instruments worth 1.50 Crs, and say gained profit of 50 lakhs in it.) of rs. 1.50 lakhs to claim 100% LTCG of 50 lakhs, under sec. 54F IT act.
Here your remaining investment is only 1.1350 Crs.; so you can get only 37.833 L exemption. So for remaining 13.166 lakhs LTCG you have to pay tax at 12.5%. No question of carry forward of LTCG.

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