Exemption under Section 54

Save Share

This query is : Open

Quick Summary

This discussion explores whether an assessee can claim an exemption under Section 54 of the Income Tax Act by deducting the cost of a previously purchased property (Flat-B) from the sale value of a newly sold property (Flat-A). The consensus is that this is not permissible if Flat-B was purchased more than one year before the sale of Flat-A, as the conditions for Section 54 exemption are not met.

Rajesh

Rajesh

(Querist)
Follow

12 October 2020 Assessee sold a residential Flat-A on 09-10-2020. He had already purchased Flat-B on 11-12-2018. Can cost of Flat-B be deducted from the sale value of Flat-A for the purpose of exemption under Section 54 of Income Tax Act? Kindly help.

Sagar Patel

Sagar Patel (Expert)
Follow

13 October 2020 Yes, If Flat-A is long term Capital Assets than you can take benifit of Section 54 of the income tax Act, 1961[As Purchase before 1 year]...Cost of Flat-B will be deducted from long term capital Gain on sale of Flat-B