SEC 54 OF IT ACT

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Jag Mohan (Querist)
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13 November 2024 A If I have 3 flats and i sell all 3 during a financial year, am I entitled to exemption of Rs 10 Cr in each of these 3 flats. In other words the exemption of Rs 10 Cr is for each flat and not in totality during a financial year.

B Direct Tax Code is expected during the next financial year(FY 25-26). Is the benefit of Sec 54 and Sec 54F likely to be discontinued ?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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14 November 2024 A. It is aggregate investment exemption u/s. 54; not for each property.
B. Most probably yes.

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Jag Mohan

Jag Mohan (Querist)
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14 November 2024 To the best of my understanding, it should be available to all 3 flats that I sell and buy new ones within the time frame specified. Sec 54 does not restrict it to selling only one flat. I can hold as many properties as I wish and claim benefit. If my assertion is untenable, please specify the portion of Sec 54 that restricts it to 10 Cr in the aggregate. Thank you.,

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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14 November 2024 Who said you cannot sell more than one property? Also I never mentioned you cannot take sec. 54 benefit for all the three properties sold in SAME Financial year. Read amended sec 54 for the limitations.

Jag Mohan

Jag Mohan (Querist)
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15 November 2024 Apologise Sir, if my intreprtation was wrong. I see merit in your assertion.

However, if there are 2 owners holding equitable shares in 3 flats, can exemption of 10 Cr be claimed by each owner under Sec 54 assuing all 3 are sold and reinvested in line with Sec 54?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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15 November 2024 Yes, the exemption is available to each owner separately. Even for each financial year (when the properties are sold in different FYs.)

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Jag Mohan

Jag Mohan (Querist)
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15 November 2024 Thank you. May I have your email ID?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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15 November 2024 You are welcome.

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