54F Exemption

Hai,

One of the assessee's has claimed exemption under 54F while filing return of income. The facts are as below:

1) Compulsory acquisition of land in Oct 2007.

2) The assessee constructed a property in November 2006 and claimed exemption u/s 54F showing the cost of construction as investment stipulated under section 54F.

Whether the stand is correct ? Can an assessee claim exemption u/s 54F when he has constructed property before sale of asset? Is there any case law supporting the assesse's stand?

Replies at the earliest would be highly useful and appreciated.

 

Replies (2)

no ...exemption can nodt be claimed bcoz as per sec. 54 F construction  is to be done within a period of 3 yrs of tranfer...so in ur case construction was 1 yr before transfer, therefore exemption is not valid

hai

Yes exemption would be available. in the act only 1 more year has been given for comletion of construction. Investment in house whether purchase or construction 1 year before is elegible for deduction. i.e. construction of house may have been started before transfer and should have been completed before expiry of 3 years from transfer of property.

 

Regards

sanjay

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