Deduction u/s 54F

This query is : Open

CA Abhishek Jain (Querist)
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15 February 2010 Dear Sir/ Madam

One person sold his long term plot in june 2008 and now he applied in june 2009 by sending 110000 rs for self financing scheme and one residential flate has been alotted to him. but he never deposite any sum in deposite scheme. he has to file his return of 08-09.

Now pls tell me, what he can do to get the deduction of Sec 54F.

Thanks,
Abhishek Jain

kiran deshpande

kiran deshpande (Expert)
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15 February 2010 The information given appears incomplete. However, on the basis of details avaialble, the reply is

Since the plot is sold in Financial Year 2008-09, he is supposed to invest in residential house, the net consideration before the due date of filing of return of income. Presuming that the due date was 31/07/2009, the net consideration which was not invested in residential house by that date should have been kept into Capital Gains Account.
If in this case, he has invested Rs.1,10,000 - from self financing scheme before that date, the exemption would be avaiable to that extent in proportion. Pl. note that it is not necessary that the investment in new house should be out of the proceeds of the asset sold. This is evident from the provision itself as the exemption is available for investment of up to one year earlier also.