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Deduction under 54f

Tax queries 366 views 1 replies

I am in process of selling some shares which will result in capital gains. I want to take benefit of 54f . My situation is following:

1st house - co-owned property.

2nd house - I am a co-owner of this new property where sale of agreement is signed abt 2 years back. Property is still under construction, will be delivered in a year and sale deed is not signed yet. Bank is financing this property.

3rd house - co-owned property. Filed release deed and now its in wife's name.

Now for 2nd property , I have signed no-objection letter to builder, given notarized franked affidative to builder to remove my name from sale of agreement/sale-deed whenever it's going to sign and hence when sale deed is going to done in next 1 year it will be only in my wife's name.

Questions:

1) Doing above does it remove me from legal owner from 2nd property so that I can claim 54f. I will have only 1st property in my name.

2) Do I need to do anything else to substantiate my release of interest in 2nd property. Is notarization of affidative sufficient. Since property is not registered I can't do release deed.

Replies (1)

Dear Anurag,

In case of the second property, have you been claiming the deduction of interest on bank loan under income from house proprty ?. If not then in my opinion as the house property is still under construction, the same will not fall under the clause of house porperty and hence should not be considered for claiming the exemption u/s 54F. So In your case you have only property 1 as a residential property at the time of transfer. 

 


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