Capital Gain Exemption income tax

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This discussion clarifies how a proprietor can claim capital gains tax exemption when selling a property owned by their proprietorship firm. The key takeaway is that the exemption under Section 54, including indexation benefits, can be claimed if the new property is purchased in the proprietor's individual name, as a proprietorship firm lacks separate legal status.

Rahul Raj

Rahul Raj (Querist)

27 February 2024 A property (House property) that is owned by a proprietor firm. The proprietor wants to sell it. now the question is how can capital exemption be claimed by the proprietor.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

27 February 2024 Take indexation benefits.
Buy another house under section 54 and claim exemption.

Rahul Raj

Rahul Raj (Querist)

28 February 2024 Will the property be purchased under the name of the proprietorship firm or the proprietor individually? If the proprietor acquires the property in their name, they will be eligible for exemption under section 54.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

28 February 2024 Property can be purchased only in the name of proprietor. Proprietorship firm has no separate legal status.

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