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Capital gain form sale of residential house property.

Pawan Kumar Singh (Finance Manager(MBA CA-Final)) (715 Points)

02 July 2016

if during the year one house property sold and exemption u/s 54 already claimed for the construction of residential house property, and subseqently in the same year other house property also sold ,capital gain form the second selling can be claimed u/s 54 or not?

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6 Replies

Shreesh Kumar (CA Final) (122 Points)
Replied 02 July 2016

Dear Pawan,

With effect from assessment year 2015-16 exemption can be claimed only in respect of one residential house property purchased/constructed in India. If more than one house is purchased or constructed, then exemption under section 54 will be available in respect of one house only. No exemption can be claimed in respect of house purchased outside India.

However larger benefits of Section 54 is that one can hold a number of properties as on the date of transfer and still claim exemption on the gains.

The answer of your query is you can claim exemption u/s 54 out of capital gain arises from selling of second house property. But exemption can not be claimed if more than one house is purchased in one assessment year.

Akhil N S (5 Points)
Replied 02 July 2016

Dear friend,

It is possible, Kindly refer CIT v. Ranjit Vithaldas [2012] 137 ITD 267 (Mum.).

Shreesh Kumar (CA Final) (122 Points)
Replied 02 July 2016

Yes, It is possible.

I miss read the query it was actually asking for capital gain for second selling but I thought to invest in purchasing of more than one house propery in same assessment year.

Pawan Kumar Singh (Finance Manager(MBA CA-Final)) (715 Points)
Replied 02 July 2016

thank you shreesh sir and akhil sir

is there any effect in answer if wife has already one residential house property and the asked question was related with husband?

Shreesh Kumar (CA Final) (122 Points)
Replied 10 July 2016

Dear Pawan,

Answer will be same due to the provision of section 54 that One can hold number of property at the time of trnasfer but also can clam exemption. Even if husband has more than 1 house then also he can claim exemption.

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