Exemption amount for sales consideration under section 54F

For the purpose of claiming Section 54F exemption, the sales consideration to be considered is the total net sale consideration of the asset, not the net gain after setting off any earlier year long-term capital losses.

• The denominator for exemption under Section 54F is always the sale consideration (₹75 lakhs), not the capital gain after loss adjustment.​

• The exemption calculation is:

  $54F\; Exemption=Capital\; Gains\times Net\; Sale\; ConsiderationAmount\; Invested\; in\; New\; House$

• The adjustment of earlier year losses (such as ₹12 lakh) affects taxable capital gain in the final return, but for the Section 54F formula and investment requirement, the full sale consideration (₹75 lakh) and the gross capital gain before set-off (₹36 lakh) are what matter.

If you invest ₹24 lakhs out of ₹75 lakhs in a new house, the exemption would be:

54F Exemption=₹36 lakhs ×₹24 lakhs/₹75 lakhs=₹11.52 lakhs 

You would get ₹11.52 lakhs exempted from LTCG, and the balance (after set-off of previous losses) would be taxable.