Section 54F Guidance
Hello: I am an Indian citizen and I already own one house.
I am in the process of buying one more house for INR 80L. The sales agreement is expected to be signed in March 2024. It will be financed as: INR 20L Equity and INR 60L Home Loan. My EMI will be INR 50K per month.
To fund the same, I will be using Long Term Capital Gains from Equity and Equity MFs.
The purchase cost in 2019 was INR 10L. The current value is INR 45L i.e. LTCG of INR 35L.
So I have multiple questions:
1) If I sell all the Equity and Equity MFs in Jan 2024. I will get a total value of INR 45L. I am planning to pay INR 20L as equity and the rest INR 25L will be paid as EMIs over 50 months.
Will Section 54F be applicable in both of these cases? i.e. LTCG will not be applied to the entire INR 35 Lakhs.
Is there a timeline within which I need to pay EMIs? Or I can pay over 50 months and still claim the LTCG waiver?
2) If I sell the Equity and Equity MFs in Jan 2024 partially for a total value of INR 20L. I will pay Equity of INR 20L using this sale. I understand that section 54F will be applicable.
Can I sell the remaining Equity and Equity MFs in April 2024 (i.e. after the purchase of the house) to fund the EMIs? Can I claim the LTCG waiver under section 54F? Or are there any timelines?
Thanks