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Deduction u/s 54

Tax queries 295 views 3 replies

Whether deduction u/s 54 is available if Construction of new house is started before selling the old house? say construction is started 6 months before selling the old house.

As per Income Tax construction should be completed within 3 years but the Act is giving no reference on when construction should be started.

Replies (3)

I  thinks  its  construction of  property  within period of 3 years  form the date of  transfer / sale of   property  , it means you have start  construction  only after  the sale . please confirm with others also . 

Deduction u/s 54 is available. Even if construction is started beflre the transfer of the capital asset

Deduction is allowed in your case even if the construction is started before selling of any property.

Within a period of one year before or two years after the date of transfer of old house, the taxpayer should acquire another residential house or should construct a residential house within a period of three years from the date of transfer of the old house.


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