Section 54F - Exemption on Capital Gains from stocks, land, etc

Hey @Gaurav_Sanghavi,

The gains would become taxable in FY 2025-26. Moreover, you can sell multiple assets and invest the proceeds in a residential property to claim the exemption.

There are more conditions that need to be satisfied:

Hope this helps!

@Surbhi_Pal
Nice read. I had one query regarding section 54F.
I had purchased an under-construction apartment in Mumbai in 2019 with a construction-based payment plan. The same was handed over to me in July-2023. I had booked LTCG and STCG by selling some shares during FY2023-24. These proceeds were used to pay for the apartment installments.

How do I claim the deduction against the capital gains?

The ITR-2 form mandatory field asking details of account and deposit date (as attached screenshot). I didn’t open any Capital Gains Account. The payments were done from my savings account.

What should be filled in account details?

Hello @Bharti_Vasvani, @TeamQuicko thanks for this. Could you please help with a clarification on the following case -

The seller has 2 residential houses in her name and 1 residential plot.

  • She intends to transfer 1 of the houses through gift/settlement to her child and also sell the plot.

  • The proceeds from the sale of the plot will be parked in a capital gains account and the funds will be entirely used to buy an apartment from a developer. The agreement to sale has been signed with the developer and the apartment will be completed in 3 years’ time.

Please clarify if she must transfer the house to her child before the sale of the plot or if she has time until she signs sale deed/registration for the new apartment. Thank you.

Hey @Jayanth, if you want to claim a capital gain exemption under section 54F, the following conditions must be satisfied:

  • Taxpayer should not own more than 1 House Property on the date of sale of the original asset (residential plot in your case)
  • They should not purchase any other house property till 1 year or construct a new house till 3 years from the date of sale (apart from the new asset purchased/ constructed for exemption)
  • New asset purchased/ constructed should not be sold till 3 years from the date of sale

Hence it is better if one of the House property is gifted before selling the plot for claiming capital gain exemption.

Hope this helps!

Dear Madam,
My question is regarding exemption u/s 54F
I purchsed a residential flat on 29.3.23 for Rs 88 Lakhs. I had generated long term capital gains of Rs 15 Laks after selling shares with sale consideration of 25 Lakhs in A.Y.2023-24. In my ITR of A.Y 2023-24 I claimed LTCG of 15 Lakhs & IT deptt accepted it.

This year in A.Y. 2024-25 I sold shares for 50 Lakhs & generated LTCG of Rs 20 Lakhs. Since I didnt consume the whole limit of LTCG in A.Y. 2023-24.
and the total sale consideration is still 75 Lakhs, well below purchase value of 88 Lakhs. Can I claim LTCG exemption of Rs 20 Lakhs. in this year’s ITR of A.Y.2024-25 under Section 54F
Thanks
S.K.Srivastava

1 Like

Hey @Ssharad_Srivastava,

In my opinion, exemption u/s 54F can only be claimed once. However, you can still get a second opinion from a CA with regard to this.

Hello,
I want to buy a residential property with myself and wife as a joint property owner. I have one property in my name and my wife doesn’t have any property in her name.
There is a LTCG arising from sale of equity shares from both of our portfolio.
Is it okay to claim exemption u/s 54F for both under joint property purchase?

Hey @Anand_Kamdar,

Yes, both you and your wife can claim the exemption u/s 54F.

The exemption will be available to the co-owners in the ratio in which they have contributed towards the new property.

Hope this helps!

Hi, Thank you for the reply.

  1. If the payment is required to be done within one year from sale of equity stocks than amount received from sale of equity portfolio can be directly paid to builder and doesn’t need to be routed through CGAS account, Is that correct?
  2. Receipt of the payment done to builder can be considered as a proof for section 54F LTCG exemption, Is that correct? Are there any other documents required?

Hi @Anand_Kamdar,

Yes, you can directly pay it to the builder. One needs to park the funds in CAGS only when it is not being using during the same FY and one has to claim the exemption.

The receipt should suffice. Even documents like the purchase agreement will serve as proof.

Hi,
Consider there are various transactions of LTCG as given below

Transaction Period FY for 54F exemption claim
LTCG from Sale of stocks Aug-24 2024-25
LTCG from Sale of stocks Aug-25 2025-26
LTCG from Sale of property Aug-25 2025-26
Buy new property Sep-24 2024-25

a. LTCG arising from multiple transactions can be exempted u/s section 54F for single house property purchase.
b. Construction status of property after 3 years from date of purchase is 80 to 90% but documentation like purchase agreement done before 3 years should be sufficient.
c. Exemption u/s 54F for different transactions of LTCG need to claimed in the FY in which the transaction was done.

Can you please confirm if above understanding is correct?