What is the maximum deduction under section 54?

What is the maximum deduction under section 54?

5,00,000 in the Capital Gains Account Scheme and, hence, he can claim exemption of Rs. 5,00,000 under section 54. In other words, exemption under section 54 for the year 2021-22 will come to Rs. 5,00,000….Computation of capital gains for the financial year 2021-22.

Particulars Rs.
Less: Cost of acquisition (*) Nil

What is the difference between section 54 and 54F?

Section 54 requires you to invest only the indexed long-term capital gains, whereas Section 54F is available if the net consideration of such assets is invested. Both these sections are available, if the investment is made for the purchase or construction of a residential house in India.

How is section 54F deduction calculated?

Deduction Amount – Net Consideration’s Full Amount is invested. In the situation of investment of the full amount of the net consideration in construction/ purchase of a residential house, then the complete amount of long term capital gain can be exempted u/s 54F.

Can I claim 54 and 54F simultaneously?

Section 54 and 54F are mutually exclusive and cannot be used at the same time, due to the nature of assets covered under these sections. So, either Section 54 exemption will be available or exemption under Section 54F will be available, depending on the nature of the long-term asset sold.

What is the maximum amount of deduction from family pension is?

In respect of family pension, deduction u/s 57(iia) of Rs. 15000 or 1/3rd of the amount received, whichever is less, is available. (i) The maximum amount not chargeable to tax in respect of senior citizens is Rs. 3,00,000.

What is section 54 of Income Tax?

The Section 54 of the Income Tax Act allows the lower of the two as exemption amount for a taxpayer: Amount of capital gains on transfer of residential property, or. Investment made for constructing or purchasing a new residential property.

What are the deduction and exemption available from capital gains u/s 54?

Exemption under section 54 can be claimed in respect of capital gains arising on transfer of capital asset, being long-term residential house property. To claim exemption under section 54, another house should be purchased within a period of one year before or two years after the date of transfer of house.

What are the exemptions given under section 54 and 54F related to capital gains?

According to section 54F an individual or HUF can claim exemption of any long term capital asset other than a residential house on investing net sale consideration in a residential house within two years in case of purchase and within three years in case of construction.

How capital gains are calculated?

This is generally the purchase price plus any commissions or fees paid. This is the sale price minus any commissions or fees paid. Subtract your basis (what you paid) from the realized amount (how much you sold it for) to determine the difference. If you sold your assets for more than you paid, you have a capital gain.

How many times can I claim capital gains exemption?

This option can be exercised by the taxpayer only once in his lifetime provided the amount of long-term capital gain does not exceed Rs. 2 crores. The option to claim capital gain exemption under Section 54, in respect of two houses, shall be available as the amount of capital gains does not exceed Rs. 2 crores.

What is the minimum amount of deduction for the family pension?

Uncommuted pension received by a family member is exempt to a certain extent. Rs. 15,000 or 1/3rd of the uncommuted pension received – whichever is less is exempt from tax.

What does section 54 of the Income Tax Act do?

Section 54 of the Income Tax Act provides the seller of a residential property with relief from capital gains tax, if the proceeds from the sale are used to acquire another residential property.

Who is exempt from capital gains under Section 54?

Hence, when a taxpayer sells a residential property and purchases another property, the taxpayer is exempt from capital gains under Section 54 of the Income Tax Act. The following conditions must be satisfied by the taxpayer to claim benefits under Section 54 of the Income Tax Act: The taxpayer is an individual or HUF.

Can a house be purchased outside of India under Section 54?

Exemption can be claimed only in respect of one residential house property purchased/constructed in India. If more than one house is purchased or constructed, then exemption under section 54 will be available in respect of one house only. No exemption can be claimed in respect of house purchased outside India.

When did the amendment of Section 54 take effect?

Amendment of section 54 Amendment of section 54. 11. In section 54 of the Income-tax Act, with effect from the 1st day of April, 1983,— (a) in sub-section (1),—