Capital Gain - sec 54

I would like to know whether benefit of sec 54 can be availed in respect of long term capital gains arising from the sale of a residential house in India by a non-resident? Can the investment in the new house be available for purchase / construction of a new residential house outside India? Can the amount deposited in the Capital Gains Account Scheme be used to dierctly repatriate funds abroad for above purpose or whether it can be firstly transferred to the NRE A/c & then transferred outside India?

Replies (4)

Ans 1 since u/s 54 ther is no expressed restriction abt availability of  exemption to NR....in ma opinion  u may get the benefit.

Ans 2 In my view i think since evn u are a non residnt and  getting d benefit u/s 54 bt will hve to purchase or construction  in INDIA since ur original asset whic u sold was in india  so on this basis u need to buy/construct in india only. n if u violate any conditon mentioned under sec 54 thn ull loose d exemption n will hve to pay tax on it.

Thanks Tushar.

However, regarding your Ans 2, pls clarify where is it stated that since the original asset was situated in India, the new asset is also required to be situated in India?

Reason -

Sec 54 uses the words"Long term Capital Gain arising frm transfer of Capital Asset being building or land appurtanent therto or residential house property income of whose is chargeable  under the head INCOME FROM HOUSE PROPERTY'    (for original asset sold)

its referring to house property income in india n since NR's income from House prprty frm Foriegn house in nt taxable in india so ull hve to buy /construct in india only for getting exemption under sec 54.

The Mumbai Tribunal judgment in case of Mrs. Prema P Shah vs ITO 282ITR (AT)211 [2006] is significant in this regard. In fact , this order of Tribunal not only openly confirmed that the exemption u/s 54 is allowed even for purchase of residential house outside India , but also stated that in UK , even lease for 150 years can be considered purchase for the purpose of section 54 .

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
30 September 2026
Senior Accounts Executive

Codeboard Technology

Chennai

MBA

View Details
Company
22 September 2026
Account Assistant

Chirag P Shah & Co. Chartered Accountant

Pune

B.Com

View Details
Company
Featured ARTICLESHIP 06 October 2026
Semi Qualified

AJAY SINGH AND CO LLP

Thane

CA Final

View Details
Company
14 October 2026
GST & TDS ASSISTANT

AGGARWAL SANJAY & ASSOCIATES

New Delhi

B.Com

View Details
Company
08 October 2026
Account Executive

Elite Taxation

New Delhi

CA Foundation

View Details
Company
16 October 2026
CA article trainee

Zerdi & Co. Chartered Accountants

Pune

CA Inter

View Details
Company
ARTICLESHIP 21 September 2026
CA Article Assistant

KK & Company Chartered Accountant

Pune

CA Inter

View Details
Company
05 October 2026
Senior Accountant

Vision IT Peripherals Pvt Ltd

Mumbai

B.Com

View Details