Pay ₹0 taxes on profits from shares & mutual funds | 54F | CGAS 

Pay ₹0 taxes on profits from shares & mutual funds | Section 54F | Capital Gains Account Scheme
Under Section 54F of the Income Tax Act, the sale or transfer of certain capital assets, excluding house property, results in taxable capital gains.
However, the provision allows for a tax exemption on long-term capital gains if the proceeds are used to purchase or construct a residential house.
Here are the key points:
1. The capital gain eligible for exemption is from the sale of any long-term capital asset other than a residential house.
2. The taxpayer must not own more than one house property at the time of claiming the exemption.
3. The new residential house must be purchased either one year before or two years after the sale of the capital asset. If constructing a house, it must be completed within three years from the sale.
4. The taxpayer cannot sell the new house within three years of its acquisition; otherwise, the exemption will be withdrawn.
5. If the assessee buys another house within one year from the sale or constructs another house within three years, the exemption under Section 54F will be withdrawn.
6. If the taxpayer is unable to utilize the sale proceeds for buying or constructing the house before the due date for filing the Income Tax Return, the funds must be deposited in a 'Capital Gains Account' with a bank to retain eligibility for the exemption.
The highest allowable deduction under Section 54F is capped at Rs. 10 crores.
In summary, Section 54F provides a tax exemption for long-term capital gains when the proceeds are invested in a residential property, subject to certain conditions and timelines. It aims to encourage investment in residential real estate by providing relief from capital gains tax.
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