Section 54f exemption

Sale of shares with STT paid is exempt from LTCG. Only LTCG are reinvested in the Residential Hosue.If the sale of share is STCG then it is taxable in your hands.

Yes this is Long Term Capital Gains

yes u can claim exemption us 54 f as u r not holding more than one RHP on date of transfer. 

click here for more explanation, as i have posted ur query on this page too : CA PASSION

Thanks Gourav,

SOme opinions say I can hold 1 house and get another one also, some say i can only hold 1

AM confused now

Prashant u can certainly hold one more house before claiming this Exemption.Coz the logic behinf this is u r selling ur asset to buy a house.So Profit maing is not ur Motive Getting a house which is need Is ur real motive.So u have to Invest all into buying new house.If u hold more than 1 house at the time of cliaming this ex u r ineligible.In the end u can hold one house + and one which u bought out of proceeds of Sale of shares.....

Hi Girish,

Please confirm if i have understood corrctly

Hence i can have 1 house given by my father 10 years back (which am currently holding) + I can buy another residential house which i can buy from the proceeds of the sale of shares?

So at the END i can hold TWO HOUSES? and can get 54f exemption? 

@ Prashant u can hold ur old property (which Dad gave)  and u will buy another house ..........Moreover u can not buy(in one year) or construst( in 3yrs) neither u can give new home on rent  ........The diffrence in 54 F and rest sections of 54 here u have to invest whole Net Considearation unlike in others where u have to invest only gains.Plus u can not Go for multiple Purchase ......IS this clear ??

Thanks Girish for the clarity

To further clarify:

I can have both the houses Dad house and Capital gain house and get excemption on capital gain

You have also pointed that I should NOT be giving the capital gain house for rent? If its given for Rent am I not eligible to 54f?

i agree with Girish sir...and to Girish Sir...sir this Girish name is very rare...and my real brother also share this name wd u... 

@ Prashant: Yes u can enjoy both the houses.And it was my misinterpretation of Act that u quoted u can not give New HP on rent.Well Let me correct this u can very well give it on Rent.

@ Gourav thanks buddy....It was chosen by my Dad means LORD OF MOUNTAINS which is SHANKAR BHAGWAN

Thanks Girish for your prompt reply, It was very helpful

Originally posted by : CA GIRISH
	@ Prashant: Yes u can enjoy both the houses.And it was my misinterpretation of Act that u quoted u can not give New HP on rent.Well Let me correct this u can very well give it on Rent. @ Gourav thanks buddy....It was chosen by my Dad means LORD OF MOUNTAINS which is SHANKAR BHAGWAN

Dear Girish,

I do not agree with your interpretation that u can very well give it on rent. In this connection please go through relevant portion of Sec-54F i.e. Proviso (b), which is reproduced as under: -

[Provided that nothing contained in this sub-section shall apply where -

          (a)  the assessee,—

       (i)  owns more than one residential house, other than the new asset, on the date of transfer of the original asset; or

      (ii)  purchases any residential house, other than the new asset, within a period of one year after the date of transfer of the original asset; or

     (iii)  constructs any residential house, other than the new asset, within a period of three years after the date of transfer of the original asset; and

(b)  the income from such residential house, other than the one residential house owned on the date of transfer of the original asset, is chargeable under the head “Income from house property”.]

**********

If new house property is given on rent than it will be taxable under the head "Income from House Property" and in that event, in my opinion, the exemption u/s-54F will not be available. Please correct me if I am wrong.

Thanks