Exemption under 54
This query is : Open
19 September 2017
Can purchase of two flats adjacent be claimed under sec 54 under capital gain
19 September 2017
Only one flat can be claimed u/s 54. Two flats not allowed. It can be converted as single flat and exemption claimed.
19 September 2017
In CIT vs D Ananda Basappa 309 ITR 329 (Kar.), where multiple flats were purchased in the same complex and were used as one unit. In this case, the tax exemption was allowed. A special leave petition filed by the income tax department against this decision, was also rejected by the Supreme Court.
Hence, it can be reasonably inferred that even after the amendment of Section 54 and 54F, providing for exemption from long-term capital gains tax, only if the investment is made in one residential house property, one can still invest in more than one house and claim the tax exemption, provided the tax payer can prove that all such flats are used as a single residential unit by the family. In the abovementioned case, two residential units were purchased, which were separated by a strong wall and were purchased from two different vendors under two separate sale deeds. The exemption was still granted to the tax payer, because both the flats were capable of being used as a single residential unit.
19 September 2017
Agreed with seetharaman sir that when flats are considered as one residential unit then you can claim exemption for same.
19 September 2017
Thanks but it available after amendment also???
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