Sec 54

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

02 March 2012 can i claim exemption u/s 54 if amount is invested by my brother but registration of new house purchased is in my name?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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04 March 2012 Please clarify-

Against what you want to claim exemption U/s 54 ?

Where your money has been utilised?

Querist : Anonymous

Querist : Anonymous (Querist)

10 March 2012 I HAVE SOLD HOUSE & AMT HAS BEEN INVESTED IN PURCHASE OF NEW HOUSE,BUT THE AMT HAS BEEN INVESTED BY MY BROTHER & NOT BY ME BUT HE IS READY TO REGISTER THAT HOUSE IN MY NAME.

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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23 July 2025 Under **Section 54** of the Income Tax Act, an exemption is available on the **capital gains** arising from the sale of a residential property, provided the **capital gains** are reinvested in the purchase of another residential property. However, there are certain conditions that need to be met:

### **Key Requirements for Claiming Exemption Under Section 54:**

1. **Sale of Residential Property**:

* You must have sold a **residential property**.

2. **Purchase of New Residential Property**:

* The exemption applies when the **capital gains** from the sale of the residential property are reinvested in purchasing a new **residential property**.
* The new house must be **purchased** within **1 year before** or **2 years after** the date of transfer of the original property, or it should be **constructed** within **3 years** from the date of sale of the original property.

3. **Owner of the New Property**:

* The exemption under **Section 54** is available only if the **new residential property is registered in your name** or the name of your **spouse**, **minor child**, or **Hindu Undivided Family (HUF)**, and not in the name of a third party.

### **Answer to Your Query**:

* **Investment by Your Brother**: The fact that your **brother** is the one who has invested the amount in the new house does **not** affect the exemption under **Section 54**.

* **Registration in Your Name**: Since you mentioned that your **brother is willing to register the property in your name**, the **ownership** of the property is in your name, which satisfies the requirement for exemption under **Section 54**.

* **Who Can Claim the Exemption**: In this case, even though the amount is invested by your brother, **you can claim the exemption** under **Section 54** because the property is registered in your name. The key factor is the **ownership** of the new property, not necessarily who funds the investment.

### **Conclusion**:

* **Yes**, you can claim exemption under **Section 54**, provided the new house is registered in your name, even if your brother invested the amount for the purchase. The critical factor is that the new property must be **registered in your name**, and the **capital gains** are used to purchase it within the stipulated time period.

* You will need to ensure that all other **conditions** under Section 54 are met (e.g., the property must be a residential property, etc.).

If you have any further questions or need clarification on the documentation or process for claiming the exemption, feel free to ask!

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