Section 54f of income tax act

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Sitesh Kumar Jha

Proprietor

37 Points Posted on 24 February 2012

Sir, I have two queries:

1) Assessee has sold two Long Term Capital Assets (other than Residential House) during f/y 2011-12, first asset has been sold for Rs. 10 lacs earning gain of Rs. 5 lacs and second asset has been sold for Rs. 15 lacs incurring loss of Rs. 1 lacs. Now please let us know what amount is required to be invested for claiming exemption u/s 54F of the net Capital Gain of Rs. 4 lacs (5 lacs - 1 lacs).

2) In relation to query 1, can we claim exemption of long term capital gain of Rs. 5 lacs on first capital asset u/s 54F by investing Rs. 10 Lacs in New House and carry forward loss of Rs. 1 lacs on second capital asset?

Replies (2)

Keval Ponkiya

CA CS MBA(Fin.) M.Com. L.L.B.

223 Points Posted on 24 February 2012

No sir, we can't claim both the benefits as to gain or loss !!!

so you have to invest with set off of loss i.e. 5-1=4

Anumanchipalli Sathikonda

Tax Consultant

1559 Points Posted on 24 February 2012

Mr.Sitesh Kumar Jha

Section 45 (Capital Gains) of income-tax act, 1961 is placed in Chapter IV - E - Computation of Total Income.

Section 74- Losses under the head "Capital Gains" is placed in Chapter VI - Aggregation of income and set off of or carry forward of loss.

A plain reading of these sections keeping the heading of the chapters in mind it is clear that one has to aggregate the incomes earned during the year and then set off of losses or carry forward unabsorbed losses.

Hence you cannot carryforward the loss.

Best wishes

Sathikonda