Section 54 of income tax act


20 May 2013

Mr. X, a Non Resident has sold a resi. property(A) in FY 2012-13 and earned Capital Gain of Rs.70 Lacs. Mr X already owns another resi. property(B) in India. Mr X wants to invest his capital gain amount in order to claim exemption.
No the query is:

1. Is exemption u/s 54 is applicable to a Non Resident?
2. If Yes for 1. , then can he claim exemption if he invests the gain in another resi. property(C) when he already owns another resi. Property (B)?
3. If yes for 2. Then can he buy a property abroad and claim exemption?

Guest (Expert) 21 May 2013

Your answer:

1 Section 54 applicable to Individual and HUF irrespective of their status (means whether R or NR)

2 Section 54 do not make any bar on number of residencial properties chargeable under the Income from House Property, in possesion or hold by assesse.

3 Also, it is no where mentioned that property must be situated in India only, hence property may be situated outside India also

Ankit Jain (Querist)
21 May 2013

Now since the due date is arriving, can Mr X deposit the money in Capital Gains Account Scheme a/c. How can he utilize the same in foreign country if the bank doesn't have any branch over there?

Guest (Expert) 21 May 2013

money should be deposited in the bank, having a scheme of capital gain scheme account, not in any other account for e.g saving or other, otherwise no exemption is eligible.

Please make sure the bank provide relevant deposit scheme.

Or amount can be utilized to purchase a property

Ankit Jain (Querist)
21 May 2013

But how can Mr. X utilize the money if it is in an account in India and the bank doesnt have a branch in USA where he lives.
Is there any procedure to transfer the money to USA

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