Section 54

Save Share

This query is : Resolved

Quick Summary

This discussion clarifies whether Section 54 of the Income Tax Act allows for capital gains tax exemption when reinvesting funds from selling a residential house into a commercial property, such as a hotel. The consensus is that Section 54 exemption is specifically for residential property investments and does not extend to commercial properties, regardless of whether the purchase is made personally or through a company where the individual is a director.

Bhawna Bihani

Bhawna Bihani (Querist)

12 January 2020 Mr. A has sold a residential house in his personal file. Now he wants to invest the funds for purchase of a hotel, ie a commercial property. The investment will be routed through a company in Mr. A is a director.
A. Can such routing of funds enable him to avail exemption u/s 54?
B. Can he do the investment in personal name in the hotel and avail exemption?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

12 January 2020 Exemption under section 54 not available for buying commercial property.

CA Shailesh +91 9393926464

CA Shailesh +91 9393926464 (Expert)

13 January 2020 A. Can such routing of funds enable him to avail exemption u/s 54?

NO

B. Can he do the investment in personal name in the hotel and avail exemption?

NO

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now