section 54F-investment in under construction flat.

[alam singh]

if net proceeds are invested in under construction flat within one year of sale-(structure complete and finishing has commenced,) but possession is not delivered within 3 years,then will the benifit under section 54F be withdrawn?

[CAGOPALJI AGRAWAL]

The construction should be completed within three years from the date of transfer of original asset. Possession or legal deed may pass on after 3 years.

AI Summary

Section 54F Tax Benefit Valid If Construction Completes in 3 Years, Even If Possession Delays A query was raised regarding the applicability of Section 54F of the Income Tax Act when net proceeds from the sale of an asset are invested in an under-construction flat. The concern was whether the tax benefit would be withdrawn if possession is not delivered within three years, despite the structure being complete and finishing commenced within one year. The response clarified that the construction must be completed within three years from the date of transfer of the original asset, and possession or legal deed transfer may occur after the three-year period without affecting the benefit.