Income tax capital gains exemption

OUR CLIENT SOLD ONE RESIDENTIAL HOUSE AND OTHER LONG TERM CAPITAL ASSET OTHER THAN SHARES AND LIABLE TO CAPITAL GAINS TAX U/S.54 & 54F OF THE INCOME TAX ACT,1961. HE WANTS TO GET THE CAPITAL GAINS EXEMPTION BY PURCHASING OR CONSTRUCTING A NEW HOUSE WITH IN THE STIPULATED PERIOD AS PER THE PROVISIONS OF THE INCOME TAX ACT,1961. NOW THE QUESTION IS THAT WHETHER PURCHASE OF ONE NEW HOUSE CAN BE CLAIMED AS EXEMPTION FOR BOTH SEC-54&54F SIMULTANEOUSLY TO THE EXTENT OF THE NEW INVESTMENT. PLEASE SUGGEST ME.
Replies (3)

Exemption u/s 54 and 54F can be availed simuntaneously

However for availing exemption u/s 54F entire NET CONSIDERATION is reqiured to be INVESTED for exempting entire cap gain whereas in sec 54 only Cap gains need to be INVESTED.

 Krishna ji,

 

The assessee can claim both the exemption on single new house, provided the conditions are satisfied.

 

e.g. Mr. X owns a self-occupied residential house and a plot of land. (he has no other house) he sells the house on 31.01.2007 for 6,50,000/-(purchased on 31.01.2002 for 4,00,000/-) and plot of land on 15.02.2007 for 5,00,000/- (purchased on 30.03.2002 for 2,00,000/-). He purchased a new residential house on 25.04.2007 for 5,00,000/-.

 

Please refer to the attachment for calculation. 

In the above case, first exemption u/s 54 is claimed and fully utilised. Then balance of cost of new house has been claimed against section 54F.**

** It’s been noted that u/s 54F exemption can be claimed as under

[Cost of new house * CG / net consideration]

Sir, Same discussion is going on your another post.

yes, bt first use 4 sec 54 exemption den go 4 54F..

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