Capital Gain exemption: Section 54 F

Asset to be transferred: Any capital asset (other than a residential house property)

Asset on which capital gain to be invested: One residential house.

• Individual or HUF

• The asset transferred should be a long term capital asset.
• A residential house property should be purchased in India within 1 year before or 2 years after the date of transfer (3 years from date of transfer incase of construction).
• The exemption is not available if the assesse,
  1. Owns more than one residential house as on the date of transfer (other than the new residential house).
  2. Purchases any residential house (other than the new residential house) within a period of 1 year after the date of transfer of original asset.
  3. Constructs any residential house (other than the new residential house) within a period of 3 years after the date of transfer of original asset.

• If entire net consideration is invested, entire capital gain is exempt from tax.
• If the cost of new asset is less than net sale consideration of the transferred asset,

• The new residential house property should not be transferred within a period of 3 years from the date of purchase or construction.

• If transferred within three years, the capital gain exempted would be taxable as long-term capital gain in the year of transfer.

• Unutilised capital gain can be claimed as exemption by depositing the same in the capital gain deposit A/c scheme with any nationalised bank before the due date of filing return of income.
• If the amount in the capital gain deposit A/c scheme remains unutilised for a period of two years (in case of purchase) or 3 years (in case of construction), the unutilised amount will be taxable as LTCG in the PY in which the 2 years or 3 years as the case maybe expires.