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Capital gain - section 54f

Sunil (manager) (149 Points)

03 August 2015

Just curious on section 54f and wondering if any such cases were dealt!

For ex:

I own 2 apartments as co owner (equal ownership). 1 plot fully owned by me that I sold.

Can I invest capital gain in another apartment and claim exemption under 54f?

To make it interesting can I invest in another 2 apartments as co owner? 54f says I cannot invest in another house within 3 yrs. Hence the doubt.

Typically in such cases are the share portions added to arrive at number of houses owned/purchased ?

Is the argument different if the co owner is a spouse?

Thanks

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3 Replies

Z ( ) (2960 Points)
Replied 03 August 2015

There are many many complications in these 2 sections 54 and 54 F and we have over 1000 judgements.

Part ownership is considered and hence you own 2 house properties and exemption u/s 54F can not be availed.

"Provided that nothing contained in this sub-section shall apply where—

(a) the assessee,—

(i) owns more than one residential house, other than the new asset, on the date of transfer of the original asset; o"

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Sunil (manager) (149 Points)
Replied 04 August 2015

First part of my doubt was out of curiousity. Actually in my case,

Myself and wife sold individualky owned plots each along with one jointly held apartment. With the money we are buying another apartment and constructing another house both jointly held.

I was hoping to get exemption on both the new residences as its for two assesses. Now I am confused if IT says I claimed 54f for apartment though partly held and constructed another house within 3 years. Hence no exemption on anything. Same argument if applied to wife, I end up paying capital gain on entire amount inspite of investment.

Heck these laws are so complicated and doesnt make sense.