CA Reacts to Finfluencer | Tax Exemption on Capital Gains | Section 54F Explained

CA reacts to @financewithsharan !💙

A few important points to remember while applying the tax exemption under section 54F of the Income Tax Act.

In this brilliant reel by Sharan @financewithsharan , he explains how one can buy a new house from selling long-term stocks without paying any capital gains tax!

Some important aspects related to the very applicability of Section 54F are discussed in this reel.

The exemptions u/s 54F are available only for Hindu Undivided Families (HUF) and individuals.

The capital gain must arise from transferring any long-term capital asset other than a residential
house.
The assessee must not own more than one house at the time of transferring the capital asset to buy another house.

The house must be purchased within one year before or two years after the date at which such capital asset is sold.

If the house is being constructed, the construction must be completed within 3 years from the sale of such a capital asset.
The house must not be sold within 3 years; else, the exemption will be withdrawn.

The exemption u/s 54F would be withdrawn if any other house is purchased (other than the one purchased) within one year from the date of selling a capital asset or the construction of another house is made within three years.

If the assessee is unable to utilize the sale proceeds for buying or constructing the house before the due for filing the Income Tax Return (ITR) in which such capital asset is sold, the procedure must be transferred to a ‘Capital Gains Account’ with a bank.
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[avinashpanchal]

Hi, what if immediately invested in house purchase, what is discloure in itr

[track]

No tax exemption, for 2nd house. Are you sure?

[sp-yeht]

Hi,
1.does this apply to sale of plot?
2. Can the consideration amount be used for purchase of plot or only house?

[AbhishekKJSGCS]

Sir what if we construct new house within 3years

[rahulsgharat]

First point is wrong, we can sell old house and use both section 54 and 54 f to buy new residential property