Mamtora & Associates
Chartered Accountants

Section 54F of income tax act provides the following conditions to get exemption on sale of certain long-term capital assets: Assessee should be either an INDIVIDUAL or HUF The asset transferred should be a long-term capital asset other than a residential house property (Let us call it "original asset") The amount of net consideration (#1) on sale of original asset should be invested into purchase / construction of ONE NEW RESIDENTIAL house (Let us call it "new house") New house can be purchased either 1 year before the date of sale or 2 years after the date of sale of original asset. In case where new residential house is being constructed, the construction should be completed within 3 years from the date of sale of original asset. New house purchased / constructed should not be located outside India. The assessee should not own more than one residential house, other than new house, on the date of transfer of original asset.  The income from new house, should not ...

Section 54 of Income Tax Act provides for exemption from capital gains on transfer of long-term capital asset being a residential house property subject to following conditions: Assessee should be either an INDIVIDUAL or HUF Asset transferred is a long-term (#1) capital asset being a RESIDENTIAL house property Capital gains arising on transfer of such property should be invested in purchasing / constructing one NEW RESIDENTIAL house property. So to get maximum benefit of section 54 exemption, assesse will be required to invest 100% of the capital gains. New asset purchased / constructed should not be located outside India. New residential house can be purchased either 1 year before the date of sale or 2 years after the date of sale. In case where new residential house is being constructed, the construction should be completed within 3 years from the date of sale. In case where whole of the capital gains are not invested in purchase / construction of new residential house, exemption wi...