Sale of Equity shares for Purchase of Residential Property

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If parents sell equity shares, they pay capital gains tax and can claim Section 54F exemption if eligible. If shares are gifted first and then sold by the child, the child bears the tax liability and may claim Section 54F, subject to ownership and investment conditions.

Rahul Khadawala

Rahul Khadawala (Querist)

10 June 2026 I am in process of buying a property where the source of funds will be my equity shares, funding from parents and home loan.
My parents would be selling their equity shares for this. However from what little I understand that they can alternatively gift those equity shares and then I can sell them from my demat account and use those funds to buy the property. With this route I wanted to understand what are the tax implications, will I be able to claim deductions under section 54f (or equivalent under latest tax laws)?
Appreciate your comments please.

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)

10 June 2026 If your parents sell the shares, they are liable for the capital gains tax and are the only ones eligible to claim Section 54F. If they gift you the shares first and you sell them, you become liable for the capital gains, and you can claim the Section 54F exemption yourself, provided you meet all eligibility criteria (like the one-house ownership rule and strict investment timelines). Ensure you use a formal Gift Deed for documentation and consult a CA to handle the specifics of the tax filing.

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Rahul Khadawala

Rahul Khadawala (Querist)

11 June 2026 Thanks for the above. One clarity is required on the eligibility criteria on house ownership to be eligible to claim under section 54F: Does the person claiming can have a maximum of 1 house under his/her name before they purchase the other house for which this section 54F is claimed?

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