Section 54f

Tax queries 966 views 3 replies

Ramesh Purbia

107 Points Posted on 02 August 2013

Respected Sir,

One of my client has sold a long term capital assets in previous year 2011-12 amounting to Rs. 12 lakhs. The assessee has purchased a new house on 12-5-2012 and invested Rs. 18 lakhs in the new house for claiming exemption under section 54F. In the Assessment Year 2012-13 he claimed exemption of whole of the long term capital gain which amounts to Rs. 8 Lakhs under section 54F.

In the previous year 2012-13, assessee sold another long term capital assets amounting to Rs. 4 Lakhs.

Whether he is entitled to take the benefit of extra invested amount (18 Lakh-12Lakh=6 Lakhs) in the Assessment year 2013-14 under section 54F????

Thanks In Advance…

Ramesh Purbia

Replies (3)

CA. Kunal Lakhotia

ACA

1006 Points Posted on 02 August 2013

no he is not allowed to take deduction u/s 54F for the CG on sale of another property an year later

Mihir

Wealth Manager

5293 Points Posted on 02 August 2013

With investment of Rs. 18,00,000/- to save long term capital gain of Rs. 12,00,000/- , the ltcg become nil and no tax shall be payable. End of story.

Subsequent year, there arises another Rs. 400,000/- ltcg, then a fresh investment to be made to save ltcg.

Ramesh Purbia

107 Points Posted on 02 August 2013

Thanks for your valuable suggestion...

But my query is as under:

"Whether the earlier investment of Rs. 18 Lakh can be considered for claiming exemption under section 54F as there is provision in this section that Assessee can purchase a house property within one year before the date on which the transfer took place."

In our case the assessee has done same thing...so will he be eligilble for exemption under section 54 F to the extent excess investment available in the previous year 2012-2013.