Section 54f
This query is : Resolved
26 March 2013
Is it possible to claim benefit of sec 54F if house property purchased in the name of son.
26 March 2013
Not possible. Decision reported in (2008) 173 Taxman 311 (Mum) may be referred to.
26 March 2013
Sir, Is there any hope if Father have the complete power of attorney over the land and property?
23 July 2025
Great question! Let’s address whether Section 54F exemption is available if the new house is purchased in the name of the son, and whether having Power of Attorney (POA) helps.
✅ Section 54F – Quick Recap
Section 54F provides exemption from capital gains if:
The assessee (an individual or HUF) sells a long-term capital asset (other than a residential house), and
Invests the net sale consideration in a residential house in their own name.
❌ Purchasing in Son’s Name – General Rule
Generally, Section 54F exemption is not allowed if the new residential house is purchased in someone else’s name — even a close relative like a son, daughter, or spouse, unless:
The purchase is made jointly with the assessee (and the assessee contributes the funds), and
The assessee is the real/beneficial owner.
⚖️ Key Case Law – Against Exemption
Prakash v. ITO [(2008) 173 Taxman 311 (Mumbai ITAT)]
Held: Exemption not allowed where the new house was purchased in the name of son, even though the entire consideration was paid by the assessee.
So, your original reference is correct.
❓ Does Having Power of Attorney Help?
Unfortunately, no — holding Power of Attorney (POA) over the son’s property does not make the father the legal or beneficial owner.
POA is only a document to act on behalf of someone; it does not transfer ownership.
Section 54F requires the assessee to be the actual owner of the new residential house.
⚖️ Case Law – Favoring Assessee (With Caution)
Some courts have taken a liberal view if:
The assessee is the real owner, and
The property is purchased in joint name with spouse or close relative, and
Entire investment is made by the assessee.
CIT v. Kamal Wahal [(2013) 351 ITR 4 (Delhi HC)]
Held: Exemption under Section 54F allowed even though the property was purchased in the name of the assessee’s wife, since assessee paid full consideration.
🟡 Note: This liberal view usually applies to spouses, not children.
✅ Best Practice / Suggestion:
To be on the safer side and ensure the exemption is allowed:
Buy the property in your own name, or
At least buy it jointly with your son, and ensure you are shown as the primary holder, and
Maintain clear documentation that you paid the full amount.
📝 Conclusion
Scenario Section 54F Exemption?
Property purchased solely in son's name ❌ No
Property purchased jointly, father pays full ⚠️ Risky, likely disallowed
Property purchased in father's name ✅ Yes
POA over son's property ❌ No effect for Section 54F
✅ Section 54F – Quick Recap
Section 54F provides exemption from capital gains if:
The assessee (an individual or HUF) sells a long-term capital asset (other than a residential house), and
Invests the net sale consideration in a residential house in their own name.
❌ Purchasing in Son’s Name – General Rule
Generally, Section 54F exemption is not allowed if the new residential house is purchased in someone else’s name — even a close relative like a son, daughter, or spouse, unless:
The purchase is made jointly with the assessee (and the assessee contributes the funds), and
The assessee is the real/beneficial owner.
⚖️ Key Case Law – Against Exemption
Prakash v. ITO [(2008) 173 Taxman 311 (Mumbai ITAT)]
Held: Exemption not allowed where the new house was purchased in the name of son, even though the entire consideration was paid by the assessee.
So, your original reference is correct.
❓ Does Having Power of Attorney Help?
Unfortunately, no — holding Power of Attorney (POA) over the son’s property does not make the father the legal or beneficial owner.
POA is only a document to act on behalf of someone; it does not transfer ownership.
Section 54F requires the assessee to be the actual owner of the new residential house.
⚖️ Case Law – Favoring Assessee (With Caution)
Some courts have taken a liberal view if:
The assessee is the real owner, and
The property is purchased in joint name with spouse or close relative, and
Entire investment is made by the assessee.
CIT v. Kamal Wahal [(2013) 351 ITR 4 (Delhi HC)]
Held: Exemption under Section 54F allowed even though the property was purchased in the name of the assessee’s wife, since assessee paid full consideration.
🟡 Note: This liberal view usually applies to spouses, not children.
✅ Best Practice / Suggestion:
To be on the safer side and ensure the exemption is allowed:
Buy the property in your own name, or
At least buy it jointly with your son, and ensure you are shown as the primary holder, and
Maintain clear documentation that you paid the full amount.
📝 Conclusion
Scenario Section 54F Exemption?
Property purchased solely in son's name ❌ No
Property purchased jointly, father pays full ⚠️ Risky, likely disallowed
Property purchased in father's name ✅ Yes
POA over son's property ❌ No effect for Section 54F
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