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Benefits u/s 54f

JERRY JOHN (60 Points)

25 October 2021  

Dear Friends,

As you know, in order to avail exemption u/s 54F, the consideration from the transfer of the long-term capital asset is to be invested to purchase a residential house within 1 year before or 2 years after the date of transfer.

In my case, I booked a flat on 24/01/2018 and took possession on 21/03/2021.  

In January 2021, I sold a capital asset with a long-term capital gain.  

Please let me know whether I can avail exemption on the above capital gain u/s 54F as I invested the total sale proceeds in the new house.  

Thanks in advance.

Jerry


 6 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (108753 Points)
Replied 26 October 2021

When was the agreement registered?

What amount you paid in FY 2020-21?

JERRY JOHN (60 Points)
Replied 26 October 2021

Hi sir

Thanks for your response.

The agreement was registered on 21/03/2021.

The final payment of Rs.60 lakh was made on 22/08/2020.  Total cost of the flat is Rs.2.42 crore.

Sold a long term asset on 12/01/2021 with a consideration of Rs.1.67 crore (long term capital gain is Rs.81 lakh)

Hope these information are helpful.

Regards

Jerry

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (108753 Points)
Replied 26 October 2021

All the payments from 13/01/2020 to 21/03/2021 for the purchase of new house property will be eligible for deduction.

JERRY JOHN (60 Points)
Replied 26 October 2021

Dear sir,

Thanks for your instant reply.

The Act says, if the consideration from the transfer of capital asset has been reinvested to purchase a house property before 1 year or after 2 years of transfer of the capital asset, the assessee is eligible for exemption u/s 54F.

In my case, the registration of the new flat was completed after receipt of sale proceeds from the transfer of the capital asset.

In this scenario, I am eligible for the benefits u/s54f as the purchase of the new house has happened within 2 years from the date of transfer of the capital asset.

If my understanding is wrong, please excuse me

Regards,

Jerry

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (108753 Points)
Replied 26 October 2021

No, not wrong; and I have not denied the exemption u/s. 54F.

Only the amount that is available for deduction is limited to the payment made in last one year.

JERRY JOHN (60 Points)
Replied 26 October 2021

Thank you sir for your response.


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