Applicability of 54F

I have 2 residential properties as under

1. Inherited share from fathers house 12.5%. Rest share to other family members

2. Inherited share from deceased wife 50%. Balance 50% with mother-in-law (she purchased the house but sale deed doesn't mention it)

Qustion. I have sold a residential plot and have substantial capital gains. Can I use the net proceeds to buy a house to claim exemption under  Section 54F?

Replies (1)

Summary: You can claim an exemption under Section 54F if you invest your net sale consideration into one new residential house in India, provided you do not own more than one other residential house on the date of sale. Because you are a co-owner of two properties, your eligibility is legally ambiguous; while some tribunal rulings support the idea that fractional/joint ownership does not disqualify you, it remains a contested area that may invite scrutiny from the Income Tax Department.

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