Exemption u/s 54

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kishan kakra (Querist)

29 January 2013 A assessee having threee residential house property H1,H2 & H3.The assesseee resides in H1 and the reamaining two houses lying vacant under his control.He subsiquently tranfers the H2 and puchases H4 with sale proceeds of H2 and thereby claims exemption u/s 54 to avoid tax liability.can he do so?

kunal

kunal (Expert)

29 January 2013 in my opinion it's not possible

On the date of transfer, the assessee should not own more than one residential house: As per proviso to section 54F If the Individual or HUF assessee has more than one residential house on the date of transfer of original asset and income from it is chargeable to tax under the head House Property then exemption will not be available u/s 54F. Thus if the assessee concerned owns two or more houses on the date of transfer of original asset then exemption u/s 54F will not be available.
and if assessee own more than one house, deeming provision of house property will attract and other house is deemed to be let out

thanks

kishan kakra

kishan kakra (Querist)

29 January 2013 Hey kunal........i m asking abt sec-54 not 54F.section-54F comes into play when assessee transfers any long term capital assest other than residential house property and invest the sale proceeds in purchase of residential house property.

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