Sec 54F exemption

[CA AJAY KUMAR AGRAWAL]

1. Mr A & his wife were co-owners in a residential house. They sold the same in June 2014 for ₹ 40 Lacs & received ₹ 20 Lacs each. Mrs A paid ₹ 20 Lacs to a builder in June 14 against a flat. The flat was ready but it was not full payment. The builder issued a receipt stating the fact. She paid ₹ 20 Lacs more in June 16 & got sale deed executed. My question is whether the LTCG (on sale of earlier house) will be said to invested in FY 2014-15 & quality for exemption?

2. Mr A paid ₹ 20 Lacs advance in June 15 to a builder against a fully ready flat (on the above lines) but as full payment not made, he could not get it transferred. The flat is same in which he has been living on rent for last 3 years. Will his LTCG also qualify as above?

Kindly share your valuable views.

AI Summary

Eligibility for Section 54F Exemption on Long-Term Capital Gains: Key Conditions and Timeframes Explained A discussion on a tax forum involves a query about the eligibility for Section 54F exemption on long-term capital gains (LTCG) following the sale of a residential property. The query details two cases: Mrs. A, who partially paid for a new flat in 2014 and completed payment in 2016, and Mr. A, who paid an advance for a flat in 2015 but did not complete the transaction. A response clarifies that for Section 54F exemption, the capital gains must be invested in a new residential property within specified timeframes, and any unutilized amount should be deposited in a capital gains account scheme by the due date.