Selling shares and MF worth Rs 60 lakh. Can I get capital gains tax exemption by investing it in an under-construction residential project?
I am a 75-year-old retired bank official, and my wife is 67. I receive a monthly pension of Rs 40,000, and my sons live in different cities. I plan to buy a two-bedroom flat for Rs 80 lakh in an upcoming gated community old-age home project, using the proceeds from the sale of shares and mutual funds. The landlord has assured completion of the project within two years and has offered a 10% discount for upfront payment. I want to know if I will be eligible for tax exemption on capital gains from the sale of shares and mutual funds worth Rs 60 lakh if I pay the entire amount before 31 March 2025, for the unfinished project. If I and my wife jointly purchase the property, will we both be eligible for a proportionate capital gains tax exemption?
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Umesh Kumar Jethani Founder, ApkiReturn: To qualify for a capital gains tax exemption under Section 54F of the Income-tax Act, invest the Rs 60 lakh proceeds from selling your shares and mutual funds in a residential property within three years. Ensure that the full amount is paid before 31 March 2025, and the property must be completed within this period. The 10% upfront payment discount does not affect your exemption eligibility. If you and your wife jointly purchase the property, each of you can claim capital gains exemption in proportion to your contribution if the following conditions are satisfied:
The tax exemption is only available to the spouse who has realised capital gains from selling the asset.
