SECTION 54F

3 years ago

I have one residential house where i am staying since last 11 years. I have also purchased 2nd house for which registration is pending with builder. I want to sale my plot (purchased during 2011) and want to use entire sale proceed towards purchase of 2nd Flat & then wanted to registered my flat. My question is:
1. Can i register my 2nd flat first (now) and then use my sale proceed to prepay my loan (before 31st March 2021) OR
2. First sale my plot and then use the sale proceed to towards 2nd Flat and register it.

The reason why i am asking above query as Section 54F says that, one should have only one Flat to get tax benefit under section 54F.

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Anik

Responded 3 years ago

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A.Hi,
Yes, you can claim the exemption under Section 54F so long as you invest the proceeds from the sale into your second house.
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Ayantika Mondal @ Prime Legal

Responded 3 years ago

A.Hi,
You can sell your older property and then use the proceeds to repay the loan on your second house. You can avail the exemption under Section 54F of the Income Tax Act. We would advise you to register then property as soon as possible.
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Vaidehi Samant

Responded 3 years ago

A.To be on the safer side I advice you to first get the registration done of your second property and then proceed towards selling your first property and since in your case I believe you have enough time to execute both of these deals in one month.. Of course you will require to enter the clause in Agreement to be registered of your second property that you will make balance amount payment in ___ period of time in whichever manner which you can discuss with your documentation lawyer and purchaser importantly but basically it will be like loan since you will make payment after registering the same. Thank you. You may the answer if you find it helpful.

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