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Capital Gain Exemption u/s 54F

21 November 2020

Dear Professionals,
I had sold my vacant site on 5th July 2019 and had a plan to buy one house and claim capital gain exemption u/s 54F. but I am not able to buy the house till 30th September 2020 and I bought a house on 3rd of October 2020. Can I claim this under section 54F exemption whether this is valid?
(I have not invested the amount in capital gain exemption scheme since my due date for filing income tax return is 31st December 2020)
Please clarify me.

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12 Replies

ayusmita (Tax consultant) (5885 Points)
Replied 21 November 2020

In my opinion yes you can claim as you brought the house with in one year

1 Like

Shivam RC (Student) (23683 Points)
Replied 21 November 2020

Yes Sir you can claim Exemption U/s 54F of the Income Tax Act 1961 since it is within the time frame. You are required to purchase one Residential House Property within 2 years or construct within 3 years one residential house in India, after the transfer of any long term capital asset.

[ Condition ( Maximum 1 Old House ) : The assessee should not own on the date of transfer of original asset more than one residential house property other than the new house. ]

2 Like

Prasad Hegde (40 Points)
Replied 21 November 2020

I have not bought the house within one year date of sale is 5th July 2019

Shivam RC (Student) (23683 Points)
Replied 21 November 2020

@ Prasad Sir, Inorder to claim Exemption U/s 54F of the Income Tax Act 1961, you are required to either purchase one Residential House Property "1 Year BEFORE" the transfer of LTCA or "Within 2 Years" from the date of transfer of the LTCA.

In your case you have purchased the House "within 2 years" from the date of transfer of the original LTCA and that too within the Return filing due date.

Hope it is clear now...

1 Like

Prasad Hegde (40 Points)
Replied 21 November 2020

Dear Mr Shivam, Thanks for the clarification. A small help, is ITD released any Notification regarding this for current AY? Since I kept the sale amount till Oct 2020 in my SB account.

Shivam RC (Student) (23683 Points)
Replied 21 November 2020

I'm not aware about any such notification issued by the Income Tax Department. I have to check it in the website if there is any such notification regarding this matter and will confirm you asap. Give me some time

1 Like

ayusmita (Tax consultant) (5885 Points)
Replied 21 November 2020

I think they don't as you brought the house with in time limit

1 Like

Shivam RC (Student) (23683 Points)
Replied 21 November 2020

You can claim deduction Sir. No such notification was issued by the ITD. I consulted with one of my Senior and he also confirmed the same.

1 Like

Prasad Hegde (40 Points)
Replied 22 November 2020

Thanks for the suggestion Mr. Shivam and Miss. Ayusmita 🙏

ayusmita (Tax consultant) (5885 Points)
Replied 22 November 2020

Welcome 😊

But shivam really answer your queries very welly

1 Like

Prasad Hegde (40 Points)
Replied 22 November 2020

That's True..

SUDHIR VARDHAN (BUSINESS HEAD IN UNIFIL LEBANON) (31 Points)
Replied 25 November 2020

I Invested in Mutual fund from 5th Nov 2014 until now for Rs. 2000 (SIP) every month. Recently is sold accumulated units from the inception until 5thDecember 2016 to book profit . Net profit was Rs.32803/-

Also i sold four company's Stocks Listed on Stock exchange which i had invested in them, way back in Year 2000. Except one stock i have losses in the others (without indexation)

1) Can i set off the Capital losses in stocks against the Capital Gains of Mutual funds?

2) Is indexation applicable on mutual funds , if yes, where can i find the same.

3) Is indexation applicable for stocks acquired in the year 2000. please share the link for my understanding & working.

4) Is the Capital Gain Exemption of Rs.100000 included in the total exemption of Rs.250,000/- for an individual.

FYI - During the financial Year 2019-20 I filed returns as RNOR.

Please guide. Thanks in advance.