Exemption U/s 54
This query is : Resolved
28 December 2010
Exemption U/s 54 regarding construction of new residential house is available from date of transfer or date on which consideration is received???? plz give any case lawws for that as supporting....
28 December 2010
Date of transfer will be counted other than for compulsory acquisition.
30 December 2010
but I have not received sale consideration yet..the property was sold in 2008-09 & sale consideration is yet to be recived.I have started construction but possession is not with me. so can i claim exemption U/s 54?
24 July 2024
Under Section 54 of the Income Tax Act, 1961, regarding exemptions for capital gains on the sale of residential property, the exemption is available when the capital gains are invested in constructing or purchasing a new residential house. Here are the key points to consider:
1. **Availability of Exemption**: The exemption under Section 54 is available if the capital gains arising from the sale of a residential property are invested in purchasing or constructing another residential property within a specified period.
2. **Start of Construction**: For claiming exemption under Section 54 in case of constructing a new residential house, the construction should commence within a specified time frame. Generally, it is interpreted that the construction should commence within one year before or two years after the date of transfer of the original property.
3. **Completion of Construction**: The construction must be completed within three years from the date of transfer of the original property.
4. **Receipt of Consideration**: The actual receipt of consideration from the sale of the original property is not a prerequisite for claiming the exemption under Section 54. The key requirement is that the capital gains should be invested in the new residential property within the specified time frames.
### Case Law and Judicial Interpretation:
While there are no specific case laws mentioned in this context, judicial interpretations have generally supported the view that the benefit under Section 54 is available based on the commencement and completion of construction timelines rather than the receipt of consideration.
### Your Situation:
- **Sale in 2008-09**: Since the property was sold in the financial year 2008-09 and you have not yet received the sale consideration, but have started construction of a new residential house, you may still be eligible to claim exemption under Section 54.
- **Commencement of Construction**: Ensure that the construction of the new residential house commences within the specified time frame as per Section 54 guidelines.
- **Completion Timeline**: Complete the construction within three years from the date of transfer of the original property (by 2011-12 financial year, considering the sale was in 2008-09).
### Important Considerations:
- **Evidence and Documentation**: Keep all necessary documents such as sale deed, construction agreements, receipts, and completion certificates to substantiate your claim for exemption under Section 54.
- **Consultation**: It is advisable to consult with a qualified tax advisor or CA who can provide personalized advice based on the specific details of your case and ensure compliance with the provisions of the Income Tax Act.
In conclusion, you may be eligible to claim exemption under Section 54 for constructing a new residential house even if you have not received the sale consideration yet, provided you meet the commencement and completion timelines specified under the law.
1. **Availability of Exemption**: The exemption under Section 54 is available if the capital gains arising from the sale of a residential property are invested in purchasing or constructing another residential property within a specified period.
2. **Start of Construction**: For claiming exemption under Section 54 in case of constructing a new residential house, the construction should commence within a specified time frame. Generally, it is interpreted that the construction should commence within one year before or two years after the date of transfer of the original property.
3. **Completion of Construction**: The construction must be completed within three years from the date of transfer of the original property.
4. **Receipt of Consideration**: The actual receipt of consideration from the sale of the original property is not a prerequisite for claiming the exemption under Section 54. The key requirement is that the capital gains should be invested in the new residential property within the specified time frames.
### Case Law and Judicial Interpretation:
While there are no specific case laws mentioned in this context, judicial interpretations have generally supported the view that the benefit under Section 54 is available based on the commencement and completion of construction timelines rather than the receipt of consideration.
### Your Situation:
- **Sale in 2008-09**: Since the property was sold in the financial year 2008-09 and you have not yet received the sale consideration, but have started construction of a new residential house, you may still be eligible to claim exemption under Section 54.
- **Commencement of Construction**: Ensure that the construction of the new residential house commences within the specified time frame as per Section 54 guidelines.
- **Completion Timeline**: Complete the construction within three years from the date of transfer of the original property (by 2011-12 financial year, considering the sale was in 2008-09).
### Important Considerations:
- **Evidence and Documentation**: Keep all necessary documents such as sale deed, construction agreements, receipts, and completion certificates to substantiate your claim for exemption under Section 54.
- **Consultation**: It is advisable to consult with a qualified tax advisor or CA who can provide personalized advice based on the specific details of your case and ensure compliance with the provisions of the Income Tax Act.
In conclusion, you may be eligible to claim exemption under Section 54 for constructing a new residential house even if you have not received the sale consideration yet, provided you meet the commencement and completion timelines specified under the law.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Two pancard
- Query Regarding Income Tax Rate on Gain from Transfer of Partnership Stake (LLP Partner)
- Transfer of MF
- SSY for 2 daughters
- Regarding E-invoice Generation
- Can we claim ITC in 28%
- GST APPLICATION
- Wrongly goods delivered to other state
- Interest on borrowed capital rental income
- Foreign commission liable for rcm
- Spice form, ? mark comes in address
- Tds on GST in connection with sale to public company
- B2B Amendment
- Restoration of certificate of practice
- Regarding change in correspondence address in SSP portal
- Regarding Advance Tax not claimed in the Return of Income for A.Y. 2025-26
- No Compliences after incorporation
- USEFUL LIFE OF USED/SECOND HAND COMMERCIAL VEHICLES
- Claiming TDS deducted by builder on Hardship compensation and Corpus
- Address Change to another state of a Registered Trust with 12AB approval
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
CAclubindia
