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Long term capital gain u/s 54

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This query is : Resolved

Priya Jain (Querist)

19 April 2013 I have a doubt with respect to the capital gain arising on sale of house u/s 54.
Suppose if the house being sold is in the name of parents. The new house being purchased is in the name of children. If the capital gain arising from the sale of house which is in the name of parents is invested in the new house being purchased in the name of children, would the same be taxable in the hands of parents.

The below recent news says that the assessee's definition should be wide enough to cover its legal heirs.
https://www.business-standard.com/article/pf/capital-gains-tax-exemption-for-joint-property-also-113020901091_1.html
Also in few cases it was held that in case of spouse the above situation is exempted u/s 54. Does the same applicable in case of parents and children?.

Kindly help in the matter.

Thanks and Regards,
Priya Jain

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

19 April 2013 We can not say that the Income Tax Authority
may not harass in the matter.
.
The judgement is in the case of husband and wife, and to be safer, it has to be applied
accordingly.
.
To avoid litigation, include the name of the child/children with the name of the parent assessee.
.

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