Sec 54f

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

12 January 2013 Case Study:
I have sold a shop from which there was a capital gain of Rs.50 Lac & I invested it in a residential house.Later on After 2 years i sold the house.So there was a long term capital gain in the previous year in which i sold the new house.This long term capital gain I again reinvested in purchasing a new house. so will I be able to take exemption of long term capital gain.

Sumit Grover

Sumit Grover (Expert)

12 January 2013 You wrote that you sold the new house after 2 years of purchase...Then it cannot be termed as Long Term Capital Gain.

SInce it was used for less than 3 years.

Now, when the above-mentioned is not long capital gain, you cannot claim exemption u/s 54.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

12 January 2013 If you are selling a shop- for getting full exemption U/s 54F, just Capital Gain is not required to be invested. You have to consider "Sales Consideration" for getting exemption.
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Assuming that you have invested 70 lacs in new residential house and sold the same for Rs. 93 lacs. 23 Lacs is STCG and 50 lacs is deemed Long Term Capital Gain exemption in respect of the same has been claimed before 2 years.
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As the deeming fiction has not been limited
for specific sub-section (3) of S 54F, such long term capital Gain will be deemed to be
LTCG U/s 54F(1) also.
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Conditions of Proviso (a)(ii)of S 54F(1) as well as S54F(2) have also been duly complied with, in my view you may get exemption U/s 54F even after transferring the new asset.
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