Section 54f

This query is : Resolved

CA Prachet Banker (Querist)
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01 November 2012 One client has a property on which he has been claiming depreciation. he has purchased the property in 1998. he has sold the asset in 2011.
can he claim exemption u/s 54-F?
is there any provision or circular u/s 54-F that if an assessee holds depreciable asset for more than 3 years, he can claim exemption
under same section?

Sunny Sonwal

Sunny Sonwal (Expert)
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01 November 2012 Section 54F - When the asset transferred is a long term capital asset other than a residential house, and if out of the consideration, investment in purchase or construction of a residential house is made within 3 years, or purchased 1 year before or 2 years after the date of transfer, then exemption from the capital gains will be available as:
1. If cost of new asset is greater than the net consideration received, the entire capital gain is exempt.
2. Otherwise, exemption = Capital Gains x Cost of new asset/ Net consideration. It may be noted that this exemption is not available, if on the date of transfer, the assessee owns any house other than the new asset.
It may be noted that the Finance Act 2000 has provided that with effect from assessment year 2001-2002, the above exemption shall not be available if assessee owns more than one residential house, other than new asset, on the date of transfer. This capital gain amount should be deposited in the Capital Gains Account Scheme of a public sector bank before the due date of filing of Income Tax Return.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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01 November 2012 There is no express provision in the act or circular of CBDT. But there are case laws in favour of the assessee ,one , among others ,is the Delhi High Court decision in Shri Rajiv Shukla's case reported in (2011) TIOL 349.

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