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SHARE SOLD AND PURHCASED HOUSE IS HE ELIGIBLE FOR DEDUCTION U/S 54F

mayuri (Tax Consultant) (247 Points)

30 August 2021

Client sold Share worth of 873000 for profit on 24th march 2021 and on June 21st he purchased the house for 32 lakhs (PROFIT FROM SHARES AND SOME BANK LOAN).

Is he eligible for deuction us 54F?

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2 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (166282 Points)
Replied 31 August 2021

Yes, provided the shares were held for more than 12 months, and STT paid over the transfer.

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v devanathan (Partner of a CA Firm) (132 Points)
Replied 31 August 2021

For claiming deduction u/s. 54F, the entire net consideration i.e net sale price has to be invested in purchase or construction of one residential house (new house) in India. In your case, you should have invested the entire sale value i.e.,8,73,000 in the house. Otherwise proportionate [Capital gain / Total consideration * amount invested (873000)] capital gain will only be allowed as deduction. It may also be noted that you may have to comply with the conditions associated with this deduction that are given as under:

(i)		should not own more than one residential house ( the income of which is chargeable under the head Income from HP), other than the new asset, on the date of transfer of the original asset; or
(ii)		should not purchase any residential house, other than the new asset, within a period of one year after the date of transfer of the original asset; or
(iii)		should not construct any residential house, other than the new asset, within a period of three years after the date of transfer of the original asset;