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Section 54F on LTCG on shares

Shailesh (Manager) (37 Points)

22 October 2021  
The buyer has purchased the property and the full payment is done. Subsequently after one month during the same FY he has sold shares on which long term capital gains is earned of Rs 4 lakh. Can he claim Rs 4 lakh deduction u/s 54F in the same FY?

 5 Replies

Kev Men (228 Points)
Replied 22 October 2021

Yes he can claim deduction under section 54F if the property purchased is a residential property and other conditions as per the section are satisfied. The residential property can be purchased upto 1 year before the date of transfer of the shares...so in the above case deduction can be taken.

Shailesh (Manager) (37 Points)
Replied 23 October 2021

Thanks!! So it is immaterial whether such amount of capital gain is actually not invested in purchase of new residential property. In the query I have said that the full amount of property purchased is paid from the amount from other sources. subsequently to full payment, the shares were sold and the gains not actually invested in property but FD was made. Still 54 F can be claimed?

CMA Poornima Madhava (CMA) (13007 Points)
Replied 23 October 2021

Yes, I think you can claim deductions u/s54f because the law itself provides time limit of 1 year for purchase of house before sale of capital assets.

sabyasachi mukherjee (6774 Points)
Replied 23 October 2021

The sale of shares must be precedent to the purchase of property.

Shailesh (Manager) (37 Points)
Replied 23 October 2021

Thanks 🙏

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