Save Rs 499 on a 2-Year Ad-Free CAclubindia Pro Membership. Subscribe Now!

Can i claim under scetion 54 in respect of under-construction property prior to selling old house?

287 views

Save Share

Ds

taxpayer

25 Points Posted on 28 March 2022

I made investment (partly investment)in under-construction property one year before selling my old property, My new under-construction property's sale agreement was done on 21st December,2021 then i sold my old property on 28 March,2022 (according to sale deed).In this scenario can i claim exemption under section 54 of income tax act 1961 and new property will be ready in 3 year from sale date of old house.

Replies (5)

Quick Summary

This discussion explores whether an individual can claim tax exemption under Section 54 of the Income Tax Act for an under-construction property purchased before selling their old house. The key question is whether the investment in the new property, made prior to the sale of the old one, disqualifies the claim, especially since the new property is under construction and will be ready in three years. The consensus leans towards it being problematic, with advice suggesting investments should typically occur after the sale date unless it's a ready-to-move-in purchase.