Two issues come up routinely for debate in the context of housing-
related tax benefits. Section 54 of the Income-Tax Act, 1961 spares
long-term capital gains from transfer of a residential house from
tax if at least such gains are ploughed back or rolled over into a
residential house within the prescribed period. The use of singular
has given rise to avoidable confusion.
Can one invest in more than one house so as to account for the
entire long-term capital gain as being reinvested?
Why not, say those who are inclined to believe that in law `a'
should always be taken to mean `any'. For good measure, logic and
equity are on their side though it must be conceded that courts have
made it clear that a fiscal law knows no equity.
Singular vs plural
Be that as it may, the point is if one has made a gain of, say, Rs
50 lakh and Parliament is prepared to leave him off the tax hook if
he buys or constructs a house within the prescribed period for at
least this amount, how does it matter whether he does so by
investing in one house or more than one house, aver the singular-
means-plural enthusiasts.
But sticklers for the letter of law think otherwise. To them, the
letter of law is a holy-writ not to be trifled with or bent — if the
law says `a house', there is no way one can impute plurality to it.
After all, it is one thing to say `he' means `she' and vice-versa
but quite another to say that singular means plural and vice-versa.
The same issue bedevils Section 80C that gives deduction for
repayment of the principal of housing loan among others — the
reference once again is to a residential house thus once again
raising the singular-plural controversy.
But the controversy is not as intense here as it is in the context
of Section 54 because the deduction under this section after all is
subject to an overall cap of Rs 1 lakh subsuming not only the EMIs
but also contribution to provident fund, life insurance premium etc.
Singular-means-plural enthusiasts aver once again with sound logic
that when Parliament has sanctioned Rs 1 lakh, how does it matter
whether you are repaying one housing loan or more than one housing
loan.
Quaint legalese
Parliament ought to set the twin controversies at rest with the
judiciary divided on the issue as discernible from the judgments
given under Section 54. One wonders in this connection why we cannot
emulate Britain and the US where simple English has come to replace
archaic and quaint legalese in legislations.
After all, a law is for the citizen more than it is for the lawyers
and judges. If the language of the law defies easy comprehension or
is ambiguous, it obviously cannot endear itself to the lay folks,
thus giving legitimacy and credence to the oft-quoted charge that
all laws are conspiracies against the laity.
The Kelkar committee expressed itself against tax shelters that
favour those with deep pockets but Section 54 and other tax shelters
show no signs of withering away or being jettisoned. At any rate, an
extant law must be as explicit and unambiguous as possible.
S. Murlidharan
(The author is a Delhi-based chartered accountant.)
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