• Whether sale consideration of gifted flat from promoter within 1 year can attract within STCG

My father was a tenant in a residential house situated in Kolkata since last 50 years after his demised landowner developed said land and gifted vide registered deed a flat to me in the year 2017-18 and I have sold within one year and received consideration of Rs.26.00 lac as per advice of the banker I have deposited in Capital Gain account entire amount within 1 months on Oct 2018.
My quarry is weather I can claim any Tax benefit under section 54(F) of I.T Act.under STCG.
You are requested to advice me regarding my Tax liability in which section ang oblige. 
Asked 4 months ago in Capital Gains Tax from KOLKATA, West Bengal



Yes, since deposit has been made in CGDS, you can claim the exemption from Capital gains. The Capital gain computation and deposit thereon needs to be reported in the ITR.

Further you must invest such amount in a residential house property within 2/3 years of sale of the property. (3 in case of construction)

We may assist you in return filing.

Lakshita Bhandari
CA, Mumbai
3545 Answers
174 Consultations

5.0 on 5.0

Dear Sir,


Hope you are doing well !!


Where an asset is acquired by gift or inheritance, the period of long term capital asset shall be reckoned from the date when the previous owner acquired such asset and the indexation shall be allowed accordingly from the year of acquisition by the previous owner. The same method is applicable for cost of acquisition.


To calculate the long-term capital gains tax payable, the following formula is to be used:


Long-term capital gain = full value of consideration received or accruing – (indexed cost of acquisition + indexed cost of improvement + cost of transfer), where


Indexed cost of acquisition = cost of acquisition x cost inflation index of the year of transfer/cost inflation index of the year of acquisition.

Indexed cost of improvement = cost of improvement x cost inflation index of the year of transfer/cost inflation index of the year of improvement.


You can claim an exemption from LTCG, under section 54 of the income-tax Act if the LTCG is reinvested in a new residential property located in India within the specified time frames. Where the new property is purchased, the gain is required to be reinvested either within 1 year prior to sale date or 2 years after the sale date. Where the new property is constructed, the time period prescribed for the reinvestment is within 3 years from the date of sale of the original asset.


Alternatively and/or additionally, you can invest the capital gains of up to Rs 50 lakhs in bonds of NHAI or REC, within six months of its accrual and get the exemption u/s 54EC.


You can call me for further assistance.



Payal Chhajed
CA, Mumbai
2853 Answers
39 Consultations

5.0 on 5.0



- The main question here is whether your father will be deemed as owner of the property or not because the property was registered in the name of the landowner which was gifted to you. 

- Your father can be deemed as owner of the property if there is any rent agreement showing lease of not less than 12 years.

- If the ownership of your father is prooved then it will be treated as gift and the capital gain earned by you will be long term capital gain hence eligible for exemption u/s 54(F).



Vivek Kumar Arora
CA, Delhi
2942 Answers
144 Consultations

5.0 on 5.0

Technically it is long term capital asset.


There is one query first that have you paid tax on such gift transaction under section 56 at that time?

Then i can assist you further.


Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.

Thank you.



Naman Maloo
CA, Jaipur
1981 Answers
17 Consultations

5.0 on 5.0



In the case of gift/inheritance, holding period of the previous owner is also included while determining whether the CG is Long term or Short Term. Since you have received the property as a gift, it will be considered as long term(including holding period of the previous owner) but you must have complied with Sec. 56 while receiving this gift.


In case you complied with it, it will be considered as LTCG and you can get the exemption under Sec. 54F.

I hope this answer satisfies your requirement.



CA Hunny Badlani

Badlani & Associates

Hunny Badlani
CA, Neemuch
794 Answers
1 Consultation

5.0 on 5.0

Hello Sir,


It will be treated as LTCG.


You will be able to claim exemption u/s 54F.

Karishma Chhajer
CA, Jodhpur
1286 Answers
7 Consultations

5.0 on 5.0

Exemption under Section 54F is not available on short term capital gains.  Short term capital gains would be taxed at slab rates.


I guess, you must have offered the consideration received on surrender of tenancy right in place of a flat as long term capital gains.  The cost for the purpose of calculating short term capital gains would be the value at which the LTCG is offered to tax.  It would be worth discussing over a call for better understanding on facts and technicalities in case you need detailed clarifications.

Jasmina Jain Shah
CA, Greater Mumbai
361 Answers
4 Consultations

5.0 on 5.0

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