LTCG related queries u/s 54F

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This discussion addresses several queries regarding Long Term Capital Gains (LTCG) under Section 54F. It clarifies whether non-LTCG funds can be held in a capital gains account for purchasing a home. The thread also explores the implications of receiving shares as a gift, specifically whether the LTCG from selling these gifted shares would be exempt under Section 54F and if any tax notices or denials of exemption should be expected. Finally, it covers the process for closing a capital gains account and obtaining necessary documentation.

Ashish Jain

Ashish Jain (Querist)
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24 October 2023 I've a couple of queries around LTCG u/s 54F.

1. Can I keep non-LTCG funds as well in capital gain accounts? I want to do this so that the corpus to buy a home stays in one place.
2. My mother wants to transfer me shares w/o consideration as a gift so that I can buy a home.
2.a. Will LTCG be exempted when I sell these shares?
2.b. Should I expect any notices if I try to seek LTCG u/s 54F in this case?
2.c. Can I be denied the LTCG exemption because of any reason in the above mentioned case?
4. Do I need to get any clearance from assessing officer when I close my capital gain account? If so, how to get it done?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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25 October 2023 1 Keep it in other deposit in the same bank. Documents required for release form capital gains account.
2a Not exempt.
2b No notice.
2c It can't be denied.
4 Not required. Show purchase agreement to the bankers.

Ashish Jain

Ashish Jain (Querist)
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25 October 2023 2a. Why not exempt? I am using the LTCG from the gifted shares to buy a home. u/s 54F, exemption should be allowed. No?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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25 October 2023 Yes you are right.....

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