| Question And Answer | |
|---|---|
| Subject: | 54F |
| Category: | Income-Tax |
| Querist: | 123 |
| Answered by: | Law Intern |
| Tags: | Capital Gains, Section 54F deduction |
| Date: | August 2, 2025 |
A has made payments for a flat during the year under ref ; but agreement was made more than 2 years before the said year; can A claim exemption u/s 54F ?
any case law ?
The requirement of section 54F is that the purchase of the new flat must be within one year before or two years after the date of transfer. The fact that the agreement was made earlier is not relevant. If payment is made, and possession is obtained, within the prescribed period, the requirement is satisfied.
In CIT v. Sardarmal Kothari (2008) 302 ITR 286 (Madras HC), the Madras High Court held that purchase of a flat under construction can qualify under section 54/54F even if the agreement was entered into before the date of transfer, as long as possession is taken within the time limit.