Income tax capital gains exemption

In my opinion, assessee can claim both the exemption i.e u/s 54 and 54F if conditions of both the provision are satisfied. The basic reason in this regard are as follows:

1. It is settled principal that section 54 and 54F are relief mechanism and therefore, if the conditions are fulfilled , the exemptions are allowable.

2. There is nothing in the Act that prohibits claim under section 54 & 54F simultaneoulsy. In fact , conditions under both the section is different and therefore both these provisions are for different situation. Hence , if conditions of the said provisions are fulfilled , claim of exemption shall lie. Further, anywhere in the above sections it is not stated that exemption claimed in respect of an asset under this section cannot be claimed under other section of the act.

However, it must be ensured that the total amount of exemption should not exceed the capital gain earned by the assessee. 

Regards,

Shraddha

Krishna ji,

The assessee can claim both the exemption on single new house, provided the conditions are satisfied.

e.g. Mr. X owns a self-occupied residential house and a plot of land. (he has no other house) he sells the house on 31.01.2007 for 6,50,000/-(purchased on 31.01.2002 for 4,00,000/-) and plot of land on 15.02.2007 for 5,00,000/- (purchased on 30.03.2002 for 2,00,000/-). He purchased a new residential house on 25.04.2007 for 5,00,000/-.

For calculation please find the attached file.

In the above case, first exemption u/s 54 is claimed and fully utilised. Then balance of cost of new house has been claimed against section 54F.**

** It’s been noted that u/s 54F exemption can be claimed as under

[Cost of new house * CG / net consideration]

members please correct me if I'm wrong.

Members, Please refer to this attachment.