54f

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

01 January 2010 Assessee sold cerain capital asset and invested the same in new residentail house property in his wife's name. Construction of new house property started before date of sale of original capital asset. Can he claim exemption u/s 54f

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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01 January 2010 Will not get benefit of section 54F on account of the following reasons.
1) Reinvestment is not done in assessee's name.
2) Construction started before the date of sale of original asset.

Ratan Sharma

Ratan Sharma (Expert)
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01 January 2010 1. Deduction is available u/s. 54F even if the new construction start before the sale but the important point is that house construction should be completed within 3 years from the date of transfer. There is no provision that house construction should be started after the date of transfer.
2. Even if the house is in the name of wife you can get the deduction subject to you prove that,
a. wife has not invested any amount in new house and her name is included only for family settlement.
b. The sale proceed is invested in new construction. i.e. investment made through your bank account.
You may have to fight upto appeal but you will get the relief.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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01 January 2010 Reinvestment for the purpose of claiming exemption under section 54F should be in the assessee's own name. Where it was in the name of the assessee's son/wife, the requirement of section 54F was held not satisfied in ITO Vs. Prakash Timaji Dhanjods (2002) 258 ITR (AT) 114 (Nag).

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