benefit u/s.54- capital gain utilised for construction of HP

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This query is : Resolved

CA Abhishek Singh (Querist)

19 February 2011 hello everyone,

one of our client plans to sell one residential house property in mumbai and construct and house property on the land owned by his father at his native plance in bihar.

can he avail the exemption from capital gains tax.

please mention caution to be taken in this regard.

waiting for ur reply urgently

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

20 February 2011 For construction on the land of his father, he must get an NOC form his father.

He can avail exemption U/s 54.

Guest

Guest (Expert)

20 February 2011 No but it can be availed if assessee can get the plot transferred in his name.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

20 February 2011 Dear Abhishek,

In Section 54, there is no mention about the purchase of land as well as its ownership.

In case father allows him to construct on his land, or on his house, there will be sufficient compliance with section 54.

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