Section 54

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DISHA (Querist)

20 October 2015 CASE: Assessee has sold one house in july2014 and purchased a house in march 2015 and claimed exemption u/s 54, Now in July2015 he sold another house and the question is can he claim exemption u/s 54 for the same asset he purchased in march 2015???

Rajesh Kumar

Rajesh Kumar (Expert)

20 October 2015 Section 54 is applicable to long term capital asset. Property purchased in March 2015 is not a long term capital asset, and hence any benefit under Section 54 is ruled out.

DISHA

DISHA (Querist)

20 October 2015 the asset sold in july2015 is another asset and not the one purchased in march 2015

Rajesh Kumar

Rajesh Kumar (Expert)

20 October 2015 It appears that assessee sold two residential property; one in july 2014, and other in july 2015. The assessee purchased a residential property in March 2015. The question is can he claim exemption for both the property under Section 54 for buying one property in March 2015. Yes. There is no bar that one cannot sell two residential property to purchase a bigger and better residential property.

DISHA

DISHA (Querist)

20 October 2015 WHETHER 2 DIFFERENT FINANCIAL YEARS DONT MATTER IN THIS CASE

Rajesh Kumar

Rajesh Kumar (Expert)

20 October 2015 No. The requirement is very simple... you had capital gain, and you used that money to buy a residential property... one year before sell or two years after sell. You had capital gain when you sold your first property and invested that within time limit. You had second capital gain, and you invested the gain before realizing capital gain. Merely because it is of two different financial years is irrelevant.

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