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Exemption u/s 54f

16 March 2015

Dear All,

I have sold my PLOT for Rs.45,00,000, due to which my long term capital gain arises to Rs.35,00,000.I have invested Rs.20,00,000 in 54EC bonds, now please let me know the amount which I should invest in 54F, so that I come to zero capital gain tax.

Please reply...with full reference to Sections and case laws, if any.....

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3 Replies

CA Rajat Bajaj (Job) (1042 Points)
Replied 16 March 2015

Since, language used in section 54F for availing exemption is different from other exemption sections of capital gain head. In 54F you have to invest full sale proceed of 45lakhs to get exemption of full capital gain of 35lakhs, but in case you have already invested in 54EC for getting exemption of 20 lakhs, and you need to get exemption of balance 15 lakhs only, then you need to invest 45/35*15= Rs 1928571.43 only. Refer section 54F for complete language.

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VAIBHAV SACHDEVA (STUDENT) (75 Points)
Replied 16 March 2015

Dear Rajat,

I agree with your point, but is there any case law for the same. And one more question, actually I have invested Rs.22 L in CGA for 54F, so whether I have to expand the Rs.19L and so or the whole amount i.e.Rs.22L.

CA Rajat Bajaj (Job) (1042 Points)
Replied 16 March 2015

if you have invested more than the required amount jn CGDS then it is also ok. and right now there is no case study in my mind regarding this, you can search it on internet.