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54 exemption

Sreejesh V K (ICMA Final Student) (147 Points)

29 March 2012

I have sold my residing house property. The Sale proceeds has been deposited in the Capital Gain Account Scheme from wchich I am withdrawing amount for construction of two new houses. Will i get Exemption u/s 54 for these two new houses. Kindly advise......

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7 Replies

Giridhar S Karandikar (Team Lead) (7543 Points)
Replied 29 March 2012

As per Section 54 of teh Act, exemption u/s 54 can be claimed only in respct of one house. However if the two houses are adjacent to each other & they can be made as an single unit, then exemption can be claimed in respect of both the houses.

2 Like

Cawas (Owner) (24 Points)
Replied 30 March 2012

Hi I would be selling my house in May of 2012 and earning long term capital gains..

Q1) As mentioned I have to invest in 54 EC bonds, what happens if there is no availability of such bonds during the six month period?

Q2) Are there any bonds under 54EC that can be subscribed to, through out the year?

Giridhar S Karandikar (Team Lead) (7543 Points)
Replied 30 March 2012

if the LTCG is not invested in 54EC bonds within 6m from the date of trasnfer then no exemption will be given & tax @ 20% will be requried to be paid.

Bonds only of NHAI & REC are required to be invested. No other bonds are eligible for investment.

2 Like

Cawas (Owner) (24 Points)
Replied 30 March 2012

Are these bonds open to subscribe thru out the year?

Sharda (Housewife) (22 Points)
Replied 30 March 2012

I have been a nominee in my mothers flat in a cooperative housing society since 2001. She expired in May 2011. Now I plan to sell the flat, will I benefit under section 54EC related to long term capital gains.

Giridhar S Karandikar (Team Lead) (7543 Points)
Replied 30 March 2012

As you are the nominee, the title of the flat should have been transferred in your name. also as per the Hindu Law, the legal heirs become the owner of the property by way of succession, wil on the death of the ownerl. Hence you can take the benefit of the Section 54EC in order to save LTCG Tax.

Sharda (Housewife) (22 Points)
Replied 30 March 2012

Hi I have already got the title in my name. Was just worried that usince I am now the sole title holder of this flat after my mothers demise not even a year ago I wld not qualify for benefits under section 54 EC because I would hate going to the income tax office due to my lack of knowledge on this subject. Thank you Giridhar for your kind support and help.