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Capital gain

Ajay Singh (Senior Accountant) (97 Points)

20 August 2011

Hi Friends

Kindly help me about below mentioned topic:

My friend sold some gold last months. There is long term capital gain. If he invest all money in to a flat, then long term capital gain is tax free or not?

Kindly help

Thanks

Ajay

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5 Replies

Sunshine (Helping All) (10575 Points)
Replied 20 August 2011

yes by way of investing the sale proceeds in a residential house property within 3 years, he can get exemption u/s 54F......

Amit Gupta (Loosening Myself) (1508 Points)
Replied 20 August 2011

Originally posted by : Sunshine...
	yes by way of investing the sale proceeds in a residential house property within 3 years, he can get exemption u/s 54F......

Provided the assessee doesnt owns more than one residential house

CA.Suresh (CFO) (89 Points)
Replied 20 August 2011

Yes, you can get the exemption u/s 54F by investing the sale proceeds in Residential House. Section 54F is a benevolent provision meant for tax relief where the sale consideration is deployed in acquisition or construction of a residential house by the taxpayer.

Key factors governing the tax exemption under this section are:

1. Sale must be of any long-term capital asset other than residential house;
2. On the date of sale, the taxpayer must not own more than one residential house;
3. Net sale consideration must be deployed in acquisition or construction of a residential house within the specified time i.e., before 1year or after 2years; and
4.No acquisition or construction of any more residential house during the specified Lock-in period.