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Section 54 query

arpit (Manager) (247 Points)

11 April 2016

Mr A has sold his property purchased in 1984 and is purchasing a new residential property. The entire sale proceeds are invested in the new house. He has done the registry of new house for 70 lakhs. Moreover he has also paid rs 25 lakhs for furniture. So can he include rs 25 lakhs spent on furniture to claim exemption under section 54 or he can only claim 70 lakhs. Please help me out

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3 Replies

Deval M. Thakkar (Student CA Final and Article Assistant at Talati & Talati Ahmedabad) (368 Points)
Replied 11 April 2016

Only expenses which increases the useful life of the property they are included in 54 not others.

So in your case cost of furniture is not included.

Deepak Kumar (Chartered Accoountant) (270 Points)
Replied 11 April 2016

Deduction is Available only in Case of Purchase/Construction of Residential House. If Furniture is attached with house and it is not possible to detach and the stamp duty also should be paid on the value of furnitre at the time of Purchase of Residential House than it is part of building & deduction u/s 54 will be available.