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Section 54F

09 June 2017

In case if there is difference between the amount of net consideration received and 50C value (higher then net consideration) and the whole amount of consideration is invested in new house property. Then the exemption under the aforesaid section will be awarded fully or due to circle rate value (sec 50c) it will be awarded proportionately?

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2 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (168997 Points)
Replied 09 June 2017

Section 50C gives power to AO in respect of such transfer, "the value so adopted or assessed [or assessable] shall, for the purposes of section 48, be deemed to be the full value of the consideration received or accruing as a result of such transfer."

Section 50C doesn't talk about its further treatment. Once the consideration is fixed as per stamp duty valuation, normal assessment based on the new valuation proceeds.

Exemption u/s. 54F remains same, it does not get reduced in valuation, but proportionately gets reduced, but thereby even reduce your additional tax liability. Which AO himself may not apply, but charge tax over full differential value.

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Peeyush Chaturvedi (53 Points)
Replied 09 June 2017

Sir in the case there is Full value consideration of Rs. 15 lacs and the 50C is 16 lacs then the amount to be invested will be Rs. 15 lacs or 16 lacs for claiming full exemption u/s 54F?