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Long term capital gain

02 December 2017

A taxpayer sold old jewellary in June 2017 on which LT Capital gain is Rs 3.70 Lacs. He purchased a DDA flat in Dec 22015 through a Bank loan. The property was registered in May 2017 and possession was received in Sept 2017.

Can the taxpayer claim exemption of capital gain based on this residential property. If not can he pay the ICICI loan out of Rs 3.5 Lacs Capital gain and claim LTCG exemption?

Regards

Sushil Jain

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4 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160886 Points)
Replied 02 December 2017

Yes, exemption u/s 54F can be availed, without any repayment of loan.......

siddharth gupta (21 Points)
Replied 02 December 2017

No you are not eligible for claiming exemption under section 54f because the DDA Flat was purchased almost 2 years ago from the date of sale of the jewelry.

the act allows exemption in case the house was purchased one year before or 2 years after from the date of sale of jewellery.

Sushil Jain (3 Points)
Replied 04 December 2017

Some experts have a view that since payment was made before one year exemption is not available. This is confusing.

siddharth gupta (21 Points)
Replied 04 December 2017

54F. [1] Subject to the provisions of sub-section [4], where, in the case of an assessee being an individual or a Hindu undivided family, the capital gain arises from the transfer of any long-term capital asset, not being a residential house [hereafter in this section referred to as the original asset], and the assessee has, *"within a period of one year before or two years after the date on which the transfer took place"* purchased, or has within a period of three years after that date constructed, one residential house in India....

The above extract from the Section 54F clearly indicates that benefit of the exemption is not available.