04 March 2016
For computing the exemption of capital gains u/s 54 F the sale consideration is used as a denominator, the numerator being the amount invested multiplied by the capital gain. The total exemption cannot exceed the capital gains. Therefore unless the full sale consideration is invested, part of the capital gains will be taxable. Higher the investment in the new asset higher the exempt capital gains.
Before another query is raised, i may clarify to avail of the exemption under section 54, it is sufficient to invest only the amount of capital gains, but under section 54 F it is he full consideration.
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