Anushka Rathod's Guide to Purchasing Your Dream House with Smart Financial Planning

Anushka Rathod, a prominent finance content creator, brings clarity to the complex world of real estate investment. In her latest guide, she focuses on how individuals can utilize capital gains from the sale of assets like shares, mutual funds, and jewellery to fund the purchase of their dream home. By understanding the nuances of Section 54F of the Income Tax Act, you can make informed decisions that bring you closer to owning your ideal residence.

Understanding Section 54F for Homebuyers

Section 54F offers a tax exemption on capital gains when the proceeds from the sale of certain assets are reinvested into buying or constructing a residential property. Anushka Rathod highlights the key points to consider:

• Full vs. Partial Exemption: To avail of the full exemption, you must reinvest all the sale proceeds into the new house. If only a portion is reinvested, the exemption will be calculated using the formula: (Cost of new house × Capital Gains) / Sale Receipts.
• Timeframe for Investment: You must purchase the new house either one year before or within two years after selling the asset. If you're constructing a house, it should be completed within three years from the date of sale.
• Minimum Holding Period: The newly acquired house should be held for at least three years to maintain the exemption.
• Investment Cap: The maximum amount considered for deduction when purchasing a new house property is ₹10 crores.
• Location of the New House: The residential property must be located in India to qualify for the exemption.

Conditions That Disqualify for Deduction

Anushka also outlines situations where you cannot claim the deduction under Section 54F:

• If you already own more than one house (excluding the new one) at the time of selling the original asset.
• If you purchase another house (other than the new one) within a year of selling the original asset.
• If you construct another house (other than the new one) within three years of selling the original asset.

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Anushka Rathod's guide provides a clear roadmap for leveraging capital gains to finance your dream home. By adhering to the stipulations of Section 54F, you can significantly reduce your tax liability and make your dream of homeownership a reality. Start planning today, and take a step closer to securing your ideal living space.