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In regards to the Section 54 and 54F of the Income tax act.

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Rahul Patel

Student CA Final

23 Points Posted on 26 December 2022

Can anyone help me in solving out 1 geniune question in regards to the Section 54 and 54F of the Capital gain chapter, which is as follows:

EXAMPLE:

If one Individual holds 3 Residential houses in its name and out of that 1 residential house if it solves out,

Then whether he/she can claim deduction u/s. 54 or 54F, by purchasing one more residential house.

And if not can you please elaborate the Section 54 and 54F.

Thanking you.

Replies (3)

Quick Summary

This discussion clarifies the application of Sections 54 and 54F of the Income Tax Act concerning capital gains tax exemption. It addresses whether an individual can claim deductions when selling one of three residential properties and purchasing another. The explanation distinguishes between Section 54 (for selling residential property) and Section 54F (for selling other assets), and touches upon scenarios involving jointly owned properties and the use of home loans for purchasing the new residence.

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

121546 Points Posted on 26 December 2022

Yes, LTCG earned by selling a residential house property can be exempted u/s. 54 of IT act, by purchase/construction of another residential HP, as specified under the subsection.

Sec. 54F is applicable when any asset other than residential house property is sold.

aaogay jab

23 Points Posted on 30 January 2023

I reside in a jointly owned residential house A with my brothers, where I barely have a room to live. All of them have multiple rooms. 3 months back, i sold a jointly owned residential plot B (with my brothers). Now, i want to buy a flat/ apartment C to reside. Can I claim capital gain exemption under sec 54 with respect to B & C. If yes, can i use sale proceeds from B elsewhere & use a home loan instead for C? Thanks in advance