Gain u/s 54F

Tax queries 166 views 2 replies
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26 Points Joined November 2022

Mr.X has 2 residential property and a commercial property in his name as on 31.03.2024.

He buys another residential property on 24.04.2024 for self

He Gifts one of the residential property previously held to his Daughter.

He sells his commercial property on 30.05.2024.

Now, can he still claim the deduction U/S 54F for the commercial property sold .

Please guide.

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On 11 April 2025 at 12:54 Report
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Master in Accounts & high court Advocate
9447 Points Joined December 2011

To determine if Mr. X can claim the deduction under Section 54F for the commercial property sold, let's break down the key factors:

Section 54F Deduction Eligibility - *Long-term capital gains*: The deduction is applicable when long-term capital gains are invested in residential property. -

 *Residential property investment*: Mr. X purchased another residential property on April 24, 2024, which could be eligible for the deduction.¹ Impact of Gifting Residential Property -

*Gift to daughter*: Mr. X gifted one of his residential properties to his daughter, which may not affect the eligibility for the deduction under Section 54F. Commercial Property Sale -

 *Sale of commercial property*: Mr. X sold his commercial property on May 30, 2024, and this sale is eligible for the deduction under Section 54F if the gains are reinvested in residential property.

Conditions for Claiming Deduction - *Ownership period*: There's no specific ownership period required for the new residential property, but the intention behind Section 54F is to encourage investment in residential properties. -

 *Co-ownership or joint ownership*: Even if Mr. X holds partial or joint ownership in the new residential property, he may still be eligible for the deduction.

Conclusion Based on the information provided, Mr. X can claim the deduction under Section 54F for the commercial property sold, considering he has reinvested the gains in a new residential property.

However, it's essential to consult a tax professional to ensure all conditions are met and to address any specific concerns related to his situation.

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On 11 April 2025 at 13:00
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26 Points Joined November 2022

Thank you sir :) 

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On 11 April 2025 at 17:52


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