Date of Allotment is Key in Under- construction Flat for Tax Exemption under Section 54F

The Central Board of Direct Taxes (CBDT) has also clarified that to qualify as an investment for construction under section 54F the crucial date is the date of allotment of flat by an institution and payment of installments was only a follow- up action and taking possession of the flat is only a formality. However, one needs to remember that the court needs to be satisfied that the sales consideration was used for investment in the new residential house.