Deduction u/s. 54 of Income Tax Act, 1961

Tax planning 1170 views 2 replies

Pradip

student

56 Points Posted on 02 December 2010

Mr. X - Owner of Residential House Property since 1981-82 gifted the said property to Mrs. X in 2002-03. This house property is proposed to be sold in 2010-11.

In whose name Cap. Gain would be taxed ?

For Claiming Exemption u/s. 54 how & in whose name Investment in new Residential House Property should be made ?

Shall it do if new investment (Residential House Property) is made by Mrs. X only because sales proceeds will be received by Mrs. X ?

Deduction u/s.54 is to be claimed by Mr X & we do not want to add Mr X's name in the new property. Is it possible ?

Replies (2)

CA Gaurav Choradia

Relationship Manager

418 Points Posted on 02 December 2010

hi Pradip

as per income tax act new property shall b purchased wiht in 2 yrs from the date of sale of old one.

here it is not given that it should b in sellers name so as per ur problem Mrs can pur, new property in her name or in joint wid Mr. X or exclusively in name of Mr. X

C.Balaji

Learner

1867 Points Posted on 10 December 2010

Dear Pradip,

To get exemption u/s 54, the Res house has to be purchased by Mrs.X who is the owner either singly or jointly.... Since she is the owner of the selling propety, she has to invest in another Res. house to claim exemption... Mr.X is not the owner now... If she purchases the Res house as a co owner, only the relevant portion will be allowed as exemption... To claim entire exemption, she has to purchase the Res house in her own name....

The Cost of Acquisiton relates back to the cost at which the Previous owner acquired the Property.