Sec 54f



Querist : Anonymous (Querist)
17 February 2014
My uncle wants to sale his land which is not a residential house and want to claim benefit u/s 54F. But he is having one house in which he is residing and another one which is registered in his hand but not having possession yet.
My question is whether he can claim the benefit u/s 54F or not?


CA Siddhartha Bhardwaj (Expert)


Click to Talk 17 February 2014
Exemption u/s 54F is NOT available in the following situations:

the assessee,—

(i) owns more than one residential house, other than the new asset, on the date of transfer of the original asset; or

(ii) purchases any residential house, other than the new asset, within a period of one year after the date of transfer of the original asset; or

(iii) constructs any residential house, other than the new asset, within a period of three years after the date of transfer of the original asset

Since your uncle owns 2 houses, he is NOT eligible for exemption u/s 54F.

CA Siddhartha Bhardwaj (Expert)


Click to Talk 17 February 2014
Exemption u/s 54F is NOT available in the following situations:

the assessee,—

(i) owns more than one residential house, other than the new asset, on the date of transfer of the original asset; or

(ii) purchases any residential house, other than the new asset, within a period of one year after the date of transfer of the original asset; or

(iii) constructs any residential house, other than the new asset, within a period of three years after the date of transfer of the original asset

Since your uncle owns 2 houses, he is NOT eligible for exemption u/s 54F.


Querist : Anonymous (Querist)
17 February 2014
but how can we say that my uncle owe two houses as one of the house is not having possession. so it mean there is no right to use the property.


Querist : Anonymous (Querist)
18 February 2014
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CA Siddhartha Bhardwaj (Expert)


Click to Talk 18 February 2014
Oh. Ok if he does not have possession, then he CANNOT be said to own 2 houses. He can avail exemption u/s 54F.

HOWEVER, please read points (ii) & (iii) of my earlier reply. where I have written that exemption will be withdrawn if the assessee purchases or constructs a new house.

So as soon as he gets possession of the house, exemption u/s 54F will become taxable in his hands.


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