Section 54 F

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This query is : Resolved

CA Shalini Prakash (Querist)

22 April 2010 Sir,
One of my clients has taken loan from her son to pay installment of housing loan. She took the loan in March 2010. She has paid the first installment in March 2010 itself, and the second in April 2010. She intends to sell some of jwellery in April end, and with the receipts she would pay the loan. Now as per section 54 F, long term capital gain from any asset other then house property, if invested in purchase of residential house would be exempt subject to the conditions. Now since she has paid one installment in March & one in April, but both were paid before the sale of jwellery. The query is can she get the benefit of Section 54 F? In the nut shell the case being, a loan taken for paying of installment, repaid back through the receipts of sale of a long term capital asset.

Aditya Maheshwari

Aditya Maheshwari (Expert)

22 April 2010 Property purchased before one year of sale of capital asset or after two years of sale is allowable for exemption u/s 54F.

In your case it is allowable even though loan is taken or the asset is bought from sale proceeds of the gold.

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