Answer

1. F

   Facts

   Sec 54F exempts long term gain on assets other than a house if the net sale value is invested in a residential house in India. You must not own more than one house, other than the new one, on the date of sale. If only part of the sale value is invested, the exemption is proportionate.

2. P

   Provisions and law

   • Sec 54F (now Sec 86)Long-term gain on other assets is exempt if the net sale value is invested in a house, subject to conditions
   • Sec 112A (now Sec 198)Long-term gains on listed equity taxed at 12.5% above ₹1,25,000 a year (transfers from 23 July 2024)
3. A

   Analysis

   If you sold shares for ₹50 lakh with a gain of ₹20 lakh and invested ₹40 lakh in the flat, the exemption is ₹20 lakh × 40/50 = ₹16 lakh under Sec 54F (now Sec 86). The remaining ₹4 lakh is taxed under Sec 112A after the ₹1,25,000 exemption. The ₹10 crore cap applies. Selling the new house within 3 years reverses the benefit.

4. C

   Conclusion

   1. 1Confirm you own at most one other house on the sale date.
   2. 2Compute net sale value and amount invested.
   3. 3Calculate the proportionate exemption.
   4. 4Claim it in Schedule CG with property details.

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