Section 54F Exemption in case of Rented Property

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  1. Anand Mantha

    Anand Mantha Member

    I own one house exclusively in my name( which is rented out) and the second one is a flat in JOINT name with my wife, where we are residing. I have a vacant site in my name, which I want to sell and invest the capital gains from that sale, in purchasing a flat or a retirement home. Am I eligible to do this, to claim Cap.Gain exemption. Thanking you,M.Anand
  2. Vishalvj

    Vishalvj Member

    Since vacant site is in your name you need to buy the new property in your name to claim cg tax exemption.
  3. Anand Mantha

    Anand Mantha Member

    Thank you Mr Vishal for your immediate reply. Under what section this exemption can be claimed? SEC 54--you sell a residential pro. and then invest in another residential pro. No condition that you shouldnt own more than one pro.SEC54EC----you sell any long term asset and then invest in Cap.Gain Bonds.54F---you sell any long term asset and then invest in a residential pro. I think for this section there is a condition, that the assessee shouldnt own more than one pro,(excluding the property to be purchased). Is a vacant site considered as a residential property??
  4. Anand Mantha

    Anand Mantha Member

    Dear Learned members, I need further clarification regarding the above sale. The vacant site which I intend to sell, originally belonged to my mother (Total extent of land 400sq.yards) She GIFTED 1/4 share of land(100 sq.yrds) EACH to her 3 sons,keeping the 4th share for herself.This was done by registered gift deed,4 years back. Now all 4 of us want to sell this entire 400 sq.yards land, to one seller for a sale consideration of Rs 1.8 crores. So each of us will get 45 lakhs. Since the individual amounts are less than 50 lakhs, IS THERE A REQUIREMENT TO DO 1% TDS ,AND TAKE FORMS 26QB & 16B from the buyer? Secondly, I need to pay the capital gain tax only on my share of sale money ie. 45 lakhs(after indexation). Please advise.
  5. Anand Mantha

    Anand Mantha Member

    All 4 of us have individual registered deeds for 100 sq.yards each.
  6. Karan Batra

    Karan Batra Well-Known Member

    1. Yes, TDS @ 1% is required to be deducted as the Total Value of Transaction is more than Rs. 50 Lakhs
    2. Section 54F would be applicable on sale of vacant land. Under Section 54F - you cannot claim exemption if you already own more than 1 house and therefore you wont be able to claim the benefit of Section 54F
    3. You can still claim the benefit of section 54EC
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