Adjustment of Equity Capital Gain to buy Property (aprtment)

Dear Experts,

I have bought this year an apartment costing nearly seventyfive lakhs and I have been used the money by selling my stocks holding in the year FY 2022-23. The total capital gain by selling is ninety lakhs. whether I could adjust this profit amount (fully or partly) in apartment cost? Please advise me.

Regards

gk

Replies (4)
Quick Summary
This discussion explores adjusting capital gains from selling shares to offset the cost of a new apartment. The user sold shares for ninety lakhs, making a capital gain, and used seventy-five lakhs to buy a flat. An expert advises that exemption under Section 54F is likely available, even though the user owns another house that is uninhabitable. The calculation involves determining the long-term capital gain and then reducing it by the proportion of funds used for the new property.

Yes, exemption u/s 54F is available.

So the facts are:

Received 90 lac from shares and used 75 lac out of it for buying a flat. And it is a long-term capital gain transaction.

First, you need to calculate the capital gain amount: 90 lac - the cost of buying those shares = LTCG.

While reporting this above LTCG in ITR, reduce exemption amount = LTCG x 75 / 90 = Exempt amount, and report the net taxable capital gain.

Thank you very much Manish ji for your lightning response. After reading your reply, I just gone through the 54f sections available in net. 

The problem I did notice is that I have a house bought in 2017. But the house is not safe to stay (from the date of purchase) so that neither I could rent it or stay there. It is about to demolish. In that condition only I have decided to buy an apartment as mentioned in my initial query.

So at this scenario whether I could avail this exemption?

Eagerly waiting for your advise.

Thank you 

gk

Yes, it is available as you own only one house right now.

Oh ...... nice to know it,

Thank you Manish ji

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