Exemption u/s 54

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

14 May 2013 An Individual/HUF sold a Long Term Capital Asset for lumpsome consideration.Is it necessary that to avail exemption u/s 54,the same sale consideration to be reinvested within the time prescribed or the assessee can reinvest by partly taking loan and partly from the sale consideration received?For eg. Rs.1 crore is the Sale Consideration and the assessee reinvests Rs.50 lakhs from loan taken and remaining Rs.50 lakhs from the sale consideration?

CA Sourabh Agarwal

CA Sourabh Agarwal (Expert)
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14 May 2013 Firstly whether you have sold a residential house property, if yes, then 100% exemption u/s 54 is available if you invest 100% capital gain. (NOT sale consideration).

Your confusion is for S. 54F which has different terms.

Querist : Anonymous

Querist : Anonymous (Querist)

14 May 2013 Sale consideration 4 crore
Less:Cost of Land 3 crore
(incl.indexation)
Capital Gain 1 Crore
now,
From sale consideration of Rs.4 crore the assessee repaid the loan of Rs.3.5 crore.To make investment as per sec.54F,he has taken loan of Rs.50 Lakhs and invested Rs.1 Crore (50 Lakhs of Sale Consideration + 50 Lakhs of Loan)to avail exemption u/s 54, can he do so ?

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Guest

Guest (Expert)

14 May 2013 Here the exemption

Capital Gain invested*amount invested/net sale consideration

I.e. 1 crore*1 crore/4crore

exemption is 25 lakhs

CA Sourabh Agarwal

CA Sourabh Agarwal (Expert)
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14 May 2013 One line you are referring S. 54F and in other line you are referring S. 54. Just be sure on this first-up