EXEMPTION UNDER SECTION 54 FOR UNDER CONSTRUCTION FLAT

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anuj kumar khaitan (Querist)
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30 July 2025 ASSESSEE SOLD A RESIDENTIAL FLAT-A IN JAN'25 FOR 1.5 CRS.HE HAD BOOKED ANOTHER UNDER CONSTRUCTION FLAT-B DURING 2021, FOR WHICH HE HAS PAID 1 CR TILL NOW AND WILL GET POSSESSION OF THE SAME IN FEB'2026.
WHETHER HE CAN CLAIM EXEMPTION OF 1 CR UNDER SECTION 54 FOR THE SAME AS HE IS GETTING POSSESSION WITHIN 2 YRS OF SALE OF FLAT-A.?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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31 July 2025 Whether agreement was registered in 2021? whether exemption was claimed for Rs. 1 Cr earlier?
Whether the project is still under construction?

anuj kumar khaitan

anuj kumar khaitan (Querist)
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01 August 2025 AGREEMENT NOT YET REGISTERED WILL BE DONE IN FEB'26.NO EXEMPTION CLAIMED FOR THIS AMOUNT OF 1 CRS.THE PROJECT IS UNDER CONSTRUCTION AND POSSESSION WILL BE GIVEN IN FEB'26

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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01 August 2025 Yes, you can claim it in FY 2024-25; provided you pay the amount of 50 lakhs (if new purchased flat is of 1.50 Crs.) before filing return; or park it in CGAS. 1988 account before filing return. He cannot claim exemption for the advance amount paid in 2021.

anuj kumar khaitan

anuj kumar khaitan (Querist)
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01 August 2025 The amt. has been paid in installments from 2021 till 2025 till date..so what's the criteria for determining if the same will be allowed or not as deduction.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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01 August 2025 You can claim only the amount paid from January 2025 till the date of possession (provided possession is received within three years).

anuj kumar khaitan

anuj kumar khaitan (Querist)
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03 August 2025 Sir if the Agreement was done in 2021 but registry is not yet done but will be done during Feb'26 then in that case will the assessee be able to claim the amount paid after January'2025.

Also, is it not possible to claim the amount paid before January 2025 as the same has been paid for the Flat which will completed and handed over on April'2026.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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03 August 2025 1. Yes,
2. No, not eligible for any payment done before the sale of original property.

anuj kumar khaitan

anuj kumar khaitan (Querist)
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19 August 2025 Sir will the assessee not get the benefit of the Case Law "CIT vs J R Subramanya Bhat" wherein the HC Stated that Date of Commencement of Construction is irrelevant and it may be commenced even before the transfer of the house.Construction of the House should be completed within 3 years from the date of transfer.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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19 August 2025 Yes, for that you have to go for appeal and try luck.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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25 September 2025 Good luck...

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