Can exemption from long term capital gains tax under section 54F be availed if one already owns a house?



A person sells a plot of vacant land, purchased over 3 years ago, and from the sale proceeds of the land, he proposes to purchase a flat so that he can avail exemption of long term capital gains tax under section 54F. However, if he already owns one previous flat(house property) can he still avail the tax exemption by purchasing a second house property? Is there any limit to the number of house properties one already owns, prior to the purchase of this new house property, in order to avail the tax exemption under discussion?

Can exemption from long term capital gains tax under section 54F be availed if one already owns a house?
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3 Replies to “Can exemption from long term capital gains tax under section 54F be availed if one already owns a house?”


  1. Yes you can avail the deduction subject to the total holding should not be more than one. The contents of section is appearign herein below;

    Capital gain on transfer of certain capital assets not to be charged in case of investment in residential house. 1
    54F. (1) 2 [Subject to the provisions of sub-section (4), where, in the case of an assessee being an individual or a Hindu undivided family], the capital gain arises from the transfer of any long-term capital asset, not being a residential house (hereafter in this section referred to as the original asset), and the assessee has, within a period of one year before or 3 [two years] after the date on which the transfer took place purchased, or has within a period of three years after that date constructed, a residential house (hereafter in this section referred to as the new asset), the capital gain shall be dealt with in accordance with the following provisions of this section, that is to say,—
    (a) if the cost of the new asset is not less than the net consideration in respect of the original asset, the whole of such capital gain shall not be charged under section 45 ;
    (b) if the cost of the new asset is less than the net consideration in respect of the original asset, so much of the capital gain as bears to the whole of the capital gain the same proportion as the cost of the new asset bears to the net consideration, shall not be charged under section 45:
    4 [Provided that nothing contained in this sub-section shall apply where—
    (a) the assessee,—
    (i) owns more than one residential house, other than the new asset, on the date of transfer of the original asset; or
    (ii) purchases any residential house, other than the new asset, within a period of one year after the date of transfer of the original asset; or
    (iii) constructs any residential house, other than the new asset, within a period of three years after the date of transfer of the original asset; and
    (b) the income from such residential house, other than the one residential house owned on the date of transfer of the original asset, is chargeable under the head “Income from house property”.]


  2. Yes you can take exemption under section 54F having not more than one house at the time of availing exemption. This one house is in addition of new flat you want to purchase of exemption under section 54F





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