Priyanka Chopra v. ACIT - Section 54F exemption on LTCG from equity sale

The ITAT Mumbai Bench examined the conditions for Section 54F exemption where an assessee sold equity shares (long-term capital asset) and invested proceeds in residential property. Held that the entire net consideration (not just capital gains) must be invested to claim full exemption under Section 54F. Where only part of the consideration is invested, the exemption is proportionately reduced: (capital gains × amount invested) / net consideration. The Tribunal also addressed timing: the new property must be purchased/constructed within Section 54F time limits counted from the date of transfer of original asset, not from the date of receipt of sale proceeds.

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