Sold shares and buying a house jointly? Can you still claim Section 54F LTCG tax exemption?

If you have made long-term capital gains from selling shares and plan to use the proceeds to buy a house, you may be eligible for a tax exemption under Section 54F of the Income-tax Act. But what happens if the property is bought jointly with another person or if part of the purchase is funded through a home loan?

Today's Q&A explains such details in response to a query by a reader.

Please note that for claiming the exemption under this section, the same money which is realised on sale of the capital asset doesn't need to be invested. The exact source for making such investment is not relevant. What is relevant is that the amount of the net sale proceeds realised from the sale of such capital asset is invested in acquiring the residential house within the prescribed time period.

This exemption is available only if the taxpayer does not own more than one residential house property on the date of sale of the capital asset. The exemption claimed earlier will get reversed if the taxpayer acquires another residential house within two years or constructs a new house within three years from the date of acquisition of the house in respect of which the exemption is claimed earlier.