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54 F of the income Tax Act1961

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abhay garg

Senior auditor

110 Points Posted on 07 October 2020

I have sold two plots in December 2019 and I have invested in the construction of a new house. The land was already purchased in April 2018. Whether or not I can avail benefits under Section 54F of Income Tax Act for both plots

Replies (5)

Quick Summary

This discussion clarifies eligibility for Section 54F of the Income Tax Act, 1961, specifically for taxpayers selling multiple properties and reinvesting in a single residential house. It confirms that selling two plots and investing the proceeds in constructing a new house generally allows for claiming the deduction. Guidance is also provided on the construction timeline and the use of the Capital Gains Account Scheme if construction isn't completed within the stipulated period.

Sagar Patel

Tax and Business Consultant

11616 Points Posted on 07 October 2020

Yes, you can avail benifit of Section 54F of Income tax Act, 1961

Amit Khare

204 Points Posted on 09 October 2020

Yes you can avail benefits of 54 F.

Pallavi P

Job

151 Points Posted on 09 October 2020

Taxpayer selling multiple properties( 2 plots in your case) & invests in one residential house is eligible to claim deduction u/s 54F. House should be constructed within 3 years from the date of transfer.

However , there are many case laws where deduction is not denied even though construction not completed within 3 years .

If you have not started construction within due date of return filling, you will get deduction u/s 54F, if you deposit Net sale consideration in Capital Gain Account Scheme.(CGAS)