Capital gains - exemption u/s 54

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Ishita (Querist)

02 September 2014 Assessee sold a residential house property and purchased a new one fulfilling conditions of section. However there is one more residential house in the name of assessee on date of transfer. Will the exemption u/s 54 available? Pls reply wrt "a residential house" mentioned in Budget 2014.

CA SUNIL K GARG

CA SUNIL K GARG (Expert)

02 September 2014 there is no such condition in sec 54 ,
however there is a condition in sec 54 F, that assesee should not own more than one residential house on the date of transfer, other than new asset.

regarding the amendment by finance act 2014, it is here clarified that prior to 2014 , the law was , if an assesse , being indiviual or HUF sells any residential house (being long term assest ) and invest the capital gain in "a residential house " than he will get deduction as per sec 54. the word a residential house has been interpreted as any or in plural term. there are decision where benefit was given for investing in more than one property. now Finance act 2014 has clarified that benefit of sec 54 will be available for investment in one residential house.
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