Tax Section 54 and 54 F
7 months ago
I sold shares and invested in flat A and claimed LTCG exemption u/s 54 F
I sold my flat and invested the proceeds in another flat B and claimed exemption u/s 54.
Can I do both these transactions in same Fin year
I do not own any other flat
A.Dear Client,
Under Section 54F of the Income Tax Act, individuals can claim an exemption on long-term capital gains (LTCG) if they sell a residential property (other than a new residential property) and invest the sale proceeds in buying or constructing a new residential property.
Similarly, under Section 54 of the Income Tax Act, individuals can claim an exemption on LTCG if they sell a residential property and invest the sale proceeds in purchasing another residential property.
To answer your specific question, it is generally allowed to claim both Section 54F and Section 54 exemptions in the same financial year, as long as the conditions provided under each section are met.
Some important considerations in this regard are:
1. Section 54F requires the investor to not own more than one residential property, excluding the new residential property being purchased. So, if you do not own any other residential property apart from flats A and B, you may meet this condition.
2. Both Section 54F and Section 54 require the investment in the new property to be made within a specified time frame to claim the exemption. It is important to adhere to these timelines to avail the benefits.
3. Each exemption has its own set of conditions that need to be met, such as the time period for the holding of the new property, among others. It is crucial to ensure compliance with these conditions to qualify for the exemptions.
It is advisable to keep detailed records and documentation of the transactions, such as sale agreements, purchase agreements, receipts, and other relevant documents, to substantiate your claim for exemptions during tax assessments.
Thank you.
Under Section 54F of the Income Tax Act, individuals can claim an exemption on long-term capital gains (LTCG) if they sell a residential property (other than a new residential property) and invest the sale proceeds in buying or constructing a new residential property.
Similarly, under Section 54 of the Income Tax Act, individuals can claim an exemption on LTCG if they sell a residential property and invest the sale proceeds in purchasing another residential property.
To answer your specific question, it is generally allowed to claim both Section 54F and Section 54 exemptions in the same financial year, as long as the conditions provided under each section are met.
Some important considerations in this regard are:
1. Section 54F requires the investor to not own more than one residential property, excluding the new residential property being purchased. So, if you do not own any other residential property apart from flats A and B, you may meet this condition.
2. Both Section 54F and Section 54 require the investment in the new property to be made within a specified time frame to claim the exemption. It is important to adhere to these timelines to avail the benefits.
3. Each exemption has its own set of conditions that need to be met, such as the time period for the holding of the new property, among others. It is crucial to ensure compliance with these conditions to qualify for the exemptions.
It is advisable to keep detailed records and documentation of the transactions, such as sale agreements, purchase agreements, receipts, and other relevant documents, to substantiate your claim for exemptions during tax assessments.
Thank you.
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