Capital Gain On Transfer Of A Long Term Capital Asset Other Than A Residential House – Sec. 54F

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Section 54F: CAPITAL GAIN ON TRANSFER OF A LONG TERM CAPITAL ASSET OTHER THAN A RESIDENTIAL HOUSE

SCOPETransfer of long term capital asset other than residential house property by an individual or HUF
AMOUNT  OF EXEMPTION If cost of new house > net consideration of assets transferred = full amount

If cost of new house < net consideration of assets transferred, the exemption = CG x (Cost of new house/ Net sale consideration)

CONDITIONS
  • Any long term capital asset other than house property is transferred
  • Assessee owns not more than one house property on the date of transfer, exclusive of the house u/s 54F
  • Exempt if invested in one residential house in India within one year before or 2 years after the date on which transfer took place or constructed a residential house in India within a period of 3 years of such transfer
  • Assessee cannot purchase for two years or construct fwithin a period of 3 years after the date of such transfer, any other residential house property.
  • Otherwise capital gains exempted will be taxable in year of purchase or construction as LTCG.
  • New house property should not be transferred for 3 years from the date of its acquisition.
IF AMOUNT NOT UTILIZED TILL FILING OF RETURN U/S 139(1)The amount of net consideration which is not utilised by the assessee for the purchase or construction of new house before the date of return shall be deposited before the due date of furnishing of return of income in Nationalized bank under the capital Gains Deposit A/c scheme.
IF DEPOSIT NOT UTILISEDUnutilized amount taxable as LTCG in the previous year in which three years from the date of transfer of original asset expires.
CONSEQUENCES OF TRANSFER BEFORE 3 YEARSAmount of capital gains exempted earlier taxable as LTCG in the previous year in which new property sold. Capital gains on new property shall be computed normally.

 

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