Capital Gains - Exemption u/s 54F

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This query is : Resolved

CA K.Srividhya (Querist)

17 June 2020 If a person is constructing one house property in his own name and one house property jointly with his spouse simultaneously , can he claim exemption u/s 54F for capital gains arising on sale of land? Whether exemption u/s 54F is allowed for the property which is constructed in his own name?

The Proviso to Sec 54F states,
"Provided that nothing contained in this sub-section shall apply where— (a) the assessee,—
(i) owns more than one residential house, other than the new asset, on the date of transfer of the original asset; or
(ii) purchases any residential house, other than the new asset, within a period of one year after the date of transfer of the original asset; or
(iii) constructs any residential house, other than the new asset, within a period of three years after the date of transfer of the original asset.

Will the Joint construction of house property with spouse amount to construction of a house property other than new asset impacting (iii) above?

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)

18 June 2020 Joint construction will not amount to construction ,meaning thereby 54F can be claimed for the house constructing in his own name.
Inference - CIT Vs.Kapil Nagpal (2015) 235 Taxman 539 (Delhi)

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