Section 54 F Capital Gain Tax Exemption

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Ajay Hans (Querist)
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21 July 2008 I have sold a house property and invested in new house which is under construction by a reputed builder with an estimated period of construction 36 months. Agreement to sale is signed by the builder. As per section 54 F, I need to invest within 3 years of property sold to get Long term capital gain exemption.

What will happen if constrcution is delayed and physical possession is given after 36 months of sale of my previous property. Will I be eligible to Capital Gain Tax exemption.

CA Pawan Goswami

CA Pawan Goswami (Expert)
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13 October 2008 Exemption of Sec 54F is available if asset transfered is other than residential house, New assets purchased is a residential house property and the individual/HUF has not any other residential house property.
In your case if proprty is not constructed within the period of three years than exemption under this section will not be available to you.