Section 54 - Exemption on Capital Gains from House Property

Income Tax Income from Capital Gains
22

Hey @shan,

Section 54 can only be claimed in the case of LTCG from assets other than a residential house property. Whereas, section 54F can be claimed when you have capital gains from a residential property and reinvest the sale proceeds into another residential property.

However, in case of section 54, if the new asset is transferred within 3 years from the date of purchase or construction, then the exemption will be withdrawn.

Hope this helps!

1 Like
23

Whether LTCG exemption can be claimed on my intended sale of property bought in 2001

  1. Booking and allotment of under construction flat. Say Mar 2024
  2. Execution of sale deed ie registered doc. APR 2024
  3. Possession of the said UNDER CONSTRUCTION flat on completion. Mar 2026
24

Yes
Exemption can be claimed for Capital Gain utilised for construction of new property before one year or after two years from the date of tranafer.

25

Hey @Sri14,

Yes, you can claim the exemption.

26

What is defined as Purchase of property

  1. Allotment letter on booking with a nominal advance
  2. Agreement for sale of new property
  3. Registration date or
  4. Possession date post completion of full payment as per agreement.
27

Hello @Sri14

In my opinion, for the purpose of exemption, date of registration with the local authority is considered as date of purchase.

Thank you.

28

Husband sold a residential property. He wants to buy residential property lying in the name of his wife. Can he do so after payment of price of property and transferring the same in the records of builder for Long Term Capital Gain adjustment.

29

Hello @scmittal

Yes, you can claim LTCG exemption of the price of the new property you purchase from your wife.

Since you are making payment and asset gets transferred, you can claim the benefit.

Thank you.

30

Thanks. Waiting for more comments

31

Hi, if we sell two properties in the same FY and buy 2 properties against those, can e still claim exemption u/s 54? For example, property A bought from gains of property X and property B bought from gains of property Y.

32

Hey @Nupur_Kothari

Yes, you can claim exemption under Section 54 for both properties separately. In your example, you can claim the exemption for the purchase of Property A against the gains from the sale of Property X, and similarly, claim the exemption for the purchase of Property B against the gains from the sale of Property Y.

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33

I sold my old residential property ( i was the single owener) and planning to reinvest on new property which is joint owenership ( me and my wife). am i eligible to get full capital gain excemption or the excemption is limited to 50% of total capital gains i received from old house as the new property is joint ownership.

34

Hi @UMA1,

Under section 54, the allowed exemption is the lower of:

  1. The long-term capital gains from selling a residential house.
  2. The investment made in purchasing or constructing a new residential house property.

In your case, as you were the sole owner of the previous property, you’ll be allowed the exemption for the lower of,

  • The LTCG from the property sold
  • Investment made in the new property (50% will be considered as you are a joint owner).

Hope the helps!

35

Thank you Surbhi , This helps. I have one more follow-up question

I have already paid 40% to my new house ( 15% self funded and 25% bank loan), it is underconstion. but recently i sold my old flat. am i eligible to claim long term capital gains for the 40% i paid towards my new flat.

Thank you

36

Hi, with the new amendments, when I sell a house, if I want to partially invest and partially pay tax, how does that calculation work?
For example, gains without indexation - 1 cr. Gains with indexation - 50 lakh. If I want to do 50 lakh 54EC investment, on what amount do I pay tax?

37

Yes, you can claim the deduction for property purchased 1 year before and 2 years after selling the old property.

38

Hi, with the new amendments, when I sell a house, if I want to partially invest and partially pay tax, how does that calculation work?
For example, gains without indexation - 1 cr. Gains with indexation - 50 lakh. If I want to do 50 lakh 54EC investment, on what amount do I pay tax?

Please help

39

Without indexation on 50 lakh ( 1 cr minus 50 lakhs investment in Bonds )

With Indexation - NIL Tax as Capital Gain exempted on investment under section 54EC