Tax applicable on exchange properties

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This discussion explores the tax implications when two individuals exchange residential properties. It questions whether capital gains tax applies to such transactions or if they can be treated as gifts, exempting both parties from tax. The possibility of claiming deductions under Section 54 for long-term held residential properties is also considered.

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(Querist)
14 July 2021 Sir,
Two it assess brothers
1st person house property exchange to 2nd person transferred
2nd person house property exchange to 1st person transferred
Question:
1.Two assess exchange of properties capital gains tax applicable in it act
2 above transactions treated in both assess books.
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CA R SEETHARAMAN

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CA R SEETHARAMAN (Expert)
14 July 2021 Treat it as gift no capital gains tax payable by both.
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Dhirajlal Rambhia

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Dhirajlal Rambhia (Expert)
01 November 2021 Even in case of exchange, both properties being residential property, deduction u/s. 54 can be availed, if long term holding.
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