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Capital Gain Exemption u/s 54F


Prasad Hegde   21 November 2020

Prasad Hegde

 17 points

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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.

avater

ayusmita (Tax consultant)     21 November 2020

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

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Shivam RC (Student)     21 November 2020

Shivam RC
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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. ]

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Prasad Hegde   21 November 2020

Prasad Hegde

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

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Shivam RC (Student)     21 November 2020

Shivam RC
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@ 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...

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Prasad Hegde   21 November 2020

Prasad Hegde

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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.

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Shivam RC (Student)     21 November 2020

Shivam RC
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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

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ayusmita (Tax consultant)     21 November 2020

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

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Shivam RC (Student)     21 November 2020

Shivam RC
Student 
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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.

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Prasad Hegde   22 November 2020

Prasad Hegde

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


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