Sec 54f

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Querist : Anonymous

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

CA Siddhartha Bhardwaj (Expert)
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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

CA Siddhartha Bhardwaj (Expert)
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Querist : Anonymous

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 : Anonymous (Querist)

18 February 2014 ?????????????????????

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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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 where I have written that exemption will be withdrawn if the assessee purchases or constructs a new house.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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