Section 54 and 54 f of income tax
7 months ago
I sold shares and invested in flat A and claimed LTCG exemption u/s 54 F
I sold my flat ( Not flat A) 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
Will i get benefit of both 54 and 54 f in views of the undermentioned clase in section 54 f which says that 54 f deduction will not be available if-
The assessee purchases additional residential house (other than the new residential house purchased/ constructed to claim an exemption under section 54F is claimed) within a period of one year from the date of transfer of the long term capital asset.
Regards
Narayanan
A.Dear Client,
Section 54 and Section 54F of the Income Tax Act provide exemptions on capital gains tax arising from the sale of residential properties. However, there are specific conditions and limitations associated with each section. Let's break down your scenario:
Section 54: This section provides an exemption for long-term capital gains arising from the sale of a residential property if the taxpayer purchases another residential property. The conditions for Section 54 include:
The new residential property must be purchased either one year before the sale or two years after the sale of the original property.
The new property must be located in India.
The new property cannot be transferred or sold within three years from the date of purchase.
Section 54F: This section provides an exemption for long-term capital gains arising from the sale of any asset other than a residential property. It allows you to claim an exemption if you invest the proceeds in the purchase or construction of a residential property. The conditions for Section 54F include:
The new residential property must be purchased within one year before the sale or within two years after the sale of the original asset.
The new property must be located in India.
The taxpayer should not own more than one residential house, other than the new one, on the date of the transfer of the original asset.
The taxpayer should not purchase another residential property within one year from the date of transfer of the original asset.
Now, regarding your specific situation:
You sold shares and invested in Flat A, claiming an exemption under Section 54F.
You sold a different flat (not Flat A) and invested the proceeds in Flat B, claiming an exemption under Section 54.
Both Section 54 and Section 54F have provisions to ensure that the taxpayer doesn't own more than one residential property (other than the new one) on the date of transfer of the original asset. In your case, if you don't own any other residential property on the date of the sale of the original asset, you should be eligible to claim the exemptions under both sections, provided you meet all the other conditions specified in the respective sections.
Thank you.
Section 54 and Section 54F of the Income Tax Act provide exemptions on capital gains tax arising from the sale of residential properties. However, there are specific conditions and limitations associated with each section. Let's break down your scenario:
Section 54: This section provides an exemption for long-term capital gains arising from the sale of a residential property if the taxpayer purchases another residential property. The conditions for Section 54 include:
The new residential property must be purchased either one year before the sale or two years after the sale of the original property.
The new property must be located in India.
The new property cannot be transferred or sold within three years from the date of purchase.
Section 54F: This section provides an exemption for long-term capital gains arising from the sale of any asset other than a residential property. It allows you to claim an exemption if you invest the proceeds in the purchase or construction of a residential property. The conditions for Section 54F include:
The new residential property must be purchased within one year before the sale or within two years after the sale of the original asset.
The new property must be located in India.
The taxpayer should not own more than one residential house, other than the new one, on the date of the transfer of the original asset.
The taxpayer should not purchase another residential property within one year from the date of transfer of the original asset.
Now, regarding your specific situation:
You sold shares and invested in Flat A, claiming an exemption under Section 54F.
You sold a different flat (not Flat A) and invested the proceeds in Flat B, claiming an exemption under Section 54.
Both Section 54 and Section 54F have provisions to ensure that the taxpayer doesn't own more than one residential property (other than the new one) on the date of transfer of the original asset. In your case, if you don't own any other residential property on the date of the sale of the original asset, you should be eligible to claim the exemptions under both sections, provided you meet all the other conditions specified in the respective sections.
Thank you.
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A.Dear Client,
Section 54 is available for long-term capital gains on the sale of a residential house, whereas Section 54F is available for long-term capital gains on the sale of any asset other than a residential house. As per the judgment passed by the Income Tax Appellate Tribunal(ITAT) Hyderabad in the case of Venkata Ramana Umareddy V/S Dy. CIT Cir-3 (3), Hyderabad (2013), an assessee can claim deduction u/s 54 and 54F simultaneously subject to that the same has been acquired in fulfillment of the conditions stipulated under the said sections. However, since the query involves substantial points of Income Tax Laws, it is suggested that you should clarify the matter either from a CA/Auditor or an Income Tax Lawyer.
Section 54 is available for long-term capital gains on the sale of a residential house, whereas Section 54F is available for long-term capital gains on the sale of any asset other than a residential house. As per the judgment passed by the Income Tax Appellate Tribunal(ITAT) Hyderabad in the case of Venkata Ramana Umareddy V/S Dy. CIT Cir-3 (3), Hyderabad (2013), an assessee can claim deduction u/s 54 and 54F simultaneously subject to that the same has been acquired in fulfillment of the conditions stipulated under the said sections. However, since the query involves substantial points of Income Tax Laws, it is suggested that you should clarify the matter either from a CA/Auditor or an Income Tax Lawyer.
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A.Dear Sir,
The question involves financial matter and Tax matter so better you ask such question to either chartered accountant or auditor for getting effective answer.
The question involves financial matter and Tax matter so better you ask such question to either chartered accountant or auditor for getting effective answer.
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