top of page
Post: Blog2_Post

🚀 ITR Filing Asst. Yr. 2023-24

has started! File now to get amazing discounts!

Exemption of Capital Gains on sale of Long Term capital assets (other than residential house) 54F

Section 54F of the Income tax provides for exemption in case of capital gains which arise on sale of any logn term capital asset (other than residential house). The exemption in case of sale of residential house is provided u/s 54 which we have already dealt with. Now we look at the major provisions of section 54F i.e. capital gain exemption on sale of any long term capital assets - 1.The provisions of this section is applicable to any Individual and HUF only. 2. Any Individual or HUF who sells any long term capital asset (other than residential house) such as shares, securities, any immovable properties i.e. Plot of land, jewellery, movables etc. is eligible for benefits under this provision. 3.The assessee shall purchase one house property either one year before or upto 2 years after the transfer of long term capital assets. Also construction of one house property can be done within 3 years from the date of transfer of original asset. 4. The entire sale consideration received from the sale of long term capital asset should be invested as mentioned in point no. 3 above. Here it is important to note that entire sale consideration (and not the Capital gain only) has to be invested in purchase/construction of new house property. The net sale consideration to be invested is Gross sale consideration received - any expenses incurred for transfer of such asset. ‌ 5.The provisions of this section will not apply in following cases : (a) When the person is the owner of more than one other residential house (other than the new one required to purc

hase/construct) ‌ (b) When the person purchases any new residential house within one year from the date of sale of asset (other than the one which he is required to purchase/construct) (c) When the person constructs any new resi

dential house within 3 years from the sale of sale of asset (other than the one which he is required to purchase/construct) 6.If the amount of sale consideration can't be invested till the due date of filing of IT return, then the balance amount needs to be invested in capital gains scheme in any scheduled and notified bank and the subsequent payment for purchase/ construction has to be made through that account only. 7. If the total amount as invested in capi

tal gains scheme is not utilised within a period of 3 years from the date of transfer of original asset, the same will be taxable in the year in which 3 year period expires. The capital gain will be in proportion to the amount unutilised and original capital gain. ‌ 8. The new house should not be transferred/sold within 3 years from the date of original sale. In case it is done so, the entire capital gain will be charged to tax in the year in which the sale is made.

3 views0 comments

Recent Posts

See All
bottom of page