income under HOUSE PROPERTY
This query is : Resolved
14 September 2009
There is a house property which a person wants to sell and out of the sale proceeds wants to purchase a shop.
Now, the provision in capital gains is that a person is not liable for LTCG only if he purchases a new house property from the sale proceeds of the old HP.
What about a SHOP ? Is there a liability for LTCG on purchase of SHOP instead of HP ?
If YES, then is there any way of escaping the LTCG ?
Now, the provision in capital gains is that a person is not liable for LTCG only if he purchases a new house property from the sale proceeds of the old HP.
What about a SHOP ? Is there a liability for LTCG on purchase of SHOP instead of HP ?
If YES, then is there any way of escaping the LTCG ?
14 September 2009
I want you to check if there is residential house mentioned in the section anywhere i guess no.
So you will get deduction for shop too.
So you will get deduction for shop too.
Aditya Maheshwari
(Expert)
14 September 2009
Section 54 states as under:
8354. 84[(1)] 85[86[Subject to the provisions of sub-section (2), where, in the case of an assessee87 being an individual or a Hindu undivided family], the capital gain arises from the transfer of a long-term capital asset 88[***], being buildings or 89lands appurtenant thereto, and being a residential house, the income of which is chargeable under the head “Income from house property†(hereafter in this section referred to as the original asset), and the assessee has within a period of 90[one year before or two years after the date on which the transfer took place purchased91], or has within a period of three years after that date constructed, a residential house, then], instead of the capital gain being charged to income-tax as income of the previous year in which the transfer took place, it shall be dealt with in accordance with the following provisions of this section, that is to say,—
(i) if the amount of the capital gain 92[is greater than the cost of 93[the residential house] so purchased or constructed (hereafter in this section referred to as the new asset)], the difference between the amount of the capital gain and the cost of the new asset shall be charged under section 45 as the income of the previous year; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its purchase or construction, as the case may be, the cost shall be nil; or
(ii) if the amount of the capital gain is equal to or less than the cost of the new asset, the capital gain shall not be charged under section 45; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its purchase or construction, as the case may be, the cost shall be reduced by the amount of the capital gain.
Hence the person has to purchase a residential house to get exemption u/s 54 or 54F
8354. 84[(1)] 85[86[Subject to the provisions of sub-section (2), where, in the case of an assessee87 being an individual or a Hindu undivided family], the capital gain arises from the transfer of a long-term capital asset 88[***], being buildings or 89lands appurtenant thereto, and being a residential house, the income of which is chargeable under the head “Income from house property†(hereafter in this section referred to as the original asset), and the assessee has within a period of 90[one year before or two years after the date on which the transfer took place purchased91], or has within a period of three years after that date constructed, a residential house, then], instead of the capital gain being charged to income-tax as income of the previous year in which the transfer took place, it shall be dealt with in accordance with the following provisions of this section, that is to say,—
(i) if the amount of the capital gain 92[is greater than the cost of 93[the residential house] so purchased or constructed (hereafter in this section referred to as the new asset)], the difference between the amount of the capital gain and the cost of the new asset shall be charged under section 45 as the income of the previous year; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its purchase or construction, as the case may be, the cost shall be nil; or
(ii) if the amount of the capital gain is equal to or less than the cost of the new asset, the capital gain shall not be charged under section 45; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its purchase or construction, as the case may be, the cost shall be reduced by the amount of the capital gain.
Hence the person has to purchase a residential house to get exemption u/s 54 or 54F
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
- Depreciation Chart Companies Act
- GST Audit whether Govt Companies are exempt?
- PTRC Show Cause Notice on Email
- Accounting treatment of AMC alongwith the purchase of Laptop
- Unable to File TDS Q2 Return – New TRACES Portal Error
- Issuing of delivery challan by seller of goods
- EPF ECR NEW RULES Sep 17th 2026
- Transfer of Physical Stock Between Two Proprietorship Concerns
- MSME disclosure and disallowance
- Taxation of crypto futures in India Fy 2026- 2027
- GST Treatment of Purchases with GST Paid where Outward Supplies of Manufactured CattleFeed Exempt
- Expert Help Required for TDS Refund 100000 Through TRACES – AY 2022–23
- IMPORT PURCHASE ENTRY PASSED IN BOOKS OF ACCOUNT
- FAST DS 26 Undisclosed Foreign Asset Disclosure Scheme 2026
- Regime change
- Goods sold but invoice not issued
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- FAST-DS 2026 Under Tax Law - No recourse or support for person declaring via this scheme?
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
