Section 54f

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rumy nagwaswala (Querist)
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19 December 2011 EXEMPTION UNDER SEC. 54F is available if

For Purchasing a new house - It should be purchased within one year before, or within 2 years after, the date of transfer of the original asset

For constructing a new house - The construction should be completed within 3 years from the date of transfer of original asset.

One of assessee has purchased a N.A.land FOR RESIDENTIAL PURPOSE before three months of transfer of original asset, can the assessee avail the benefit of Sec 54 F if he completes the construction on the said PLOT within a period of THREE YEARS as stipulated in the second condition of Sec 54 F

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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19 December 2011 Yes, he can avail benefit to the extent of cost incurred after the sale of original asset. In my view, construction cost will qualify for deduction in this case as land has been acquired prior to the transfer.
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The unutilised amount can be kept in a separate bank a/c known as Capital Gains Savings Bank A/c.