Overseas education fees tax exempted
tions are satisfied. For the exemption to be claimed under Section 54F, the following conditions need to be satisfied:
The assessee is an individual or an HUF
The capital gain arises from the sale of a longterm capital asset not being a residential house.
The assessee within a period of one year before or two years after the date of transfer, purchases a residential house or within a period of three years after the date of transfer, constructs a residential house.
The assessee does not own more than one residential house, other than the new asset.
The assessee does not within two years purchase, or three years construct, any house other than the new house.
The quantum of exemption will be on the following basis:
If the amount invested is more than or equal to net consideration, then the entire capital gain
If the amount invested is less than the net consideration, then you have calculate the qualifying amount by this formula: Multiple amount invested with the capital gain and divide it by net consideration.
For claiming exemption under Section 54F, the amount not invested towards purchase of the new asset within one year before the date of transfer or the amount not utilised for the purchase or construction of the new asset before the due date of furnishing the return of income for the relevant assessment year, has to be deposited before the due date for furnishing the return of income, in any bank under capital gains account scheme.
QMy daughter is pursuing higher studies in Austr- alia. Can I claim deduction for her university fees under Section 80c or any other section. If yes, what is the maximum limit?
The deduction under Section 80C is restricted to `1.5 lakh. There is no restriction on the amount of deduction towards the payment of tuition fees for the education of children under 80C.
However, the section has an overall ceiling of `1.5 lakh. The deduction under Section 80C is allowable only for pursuing whole time education in India. The deduction for interest on loan obtained for higher education can be claimed under Section 80E.
(The writer is a CA based in Hyderabad. He can be contacted at info@
rathiandmalani.com)