Using sec 54F to purchase two residential houses with a gap of an year

Hi

I recently sold some company ESOPs worth 3.5 CR (FY 23-24). The ESOPs were granted at different times say 1000 in 2016, 1000 in 2017, 1000 in 2018. Now I sold 500 of the stocks granted in 2016 for 50 lakhs in one trade and the remaining 2500 for 3CR in another trade.

I am in the process of buying a residential property for self-use for about 2.5 CR and use sec. 54F to claim exemption on capital gains corresponding to 2.5 CR for FY 23-24

So now I am left 1CR worth of net consideration and corresponding capital gains.

As I understand I can buy a second house after a gap of one year (FY-24-25) and claim exemption on it under sec. 54F. However, I am not sure if I can use the partial 1CR remaining amount for this. If I can, I will deposit this amount in Capital gains scheme account for a period of one year. 

If I cannot, I plan to invest 50L in sec. 54 EE specified asset and claim exemption on it under sec. 54 EE and pay capital gains on remaining 50L. Hope I can use 54EE in addition to 54F.

 

Please help understand, if the above two options are possible for tax saving. Thanks!

 

 

 

Replies (1)
Hi Shaun,
If you buy a property and take exemption in section 54F, that means you shouldn't have own any other property in your name and also you can't buy any other property after one year since you need to buy the property one year before or after the date of transaction and that time already lapse till that time.

Also, you can buy specified assets u/s 54EE and claim exemption of 50L. But for your clarification in 54F, the deduction will be proportionate to net consideration, but in 54EE, the deduction will be directly from capital gains.

I'll be happy to guide you personally, so I'm leaving the details in your inbox.

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