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Exemption U/Sec.54F

Tax queries 1086 views 6 replies

Hi This is Vamsi, Can any clarify me whether U/s 54F an assessee can get exemption if the total consideration is invested in 2 house properties (He doesnot hold even one house property today).  If the assessee can invest in 2 houses is there any judgement supporting this.

Replies (6)

Dear Vamsi,

                      There are cases where adjacent flats and floors of same buildings were treated as one single residential house for the purpose of sec 54 exemption. But for two entirely different houses am not sure

https://taxworry.com/can-exemption-us-54f-be-claimed-for-buying-two-adjacent-flats-joined-by-breaking-internal-wall/comment-page-1/

Section 54 refers to reinvestment in "a" residential house. Experts have expressed contrary opinions on whether reinvestment in more than one house will qualify for the exemption. The Bombay Bench of the Tribunal, in K. G. Vyas vs 7th ITO (1986 16 ITD 195), had held that the assessee was entitled to the exemption in respect of reinvestment in more than one flat. Recently, however, the Mumbai Bench of the Tibunal, in Mrs Gulshanbanoo R. Mukhi vs JCIT (2002 83 ITD 649), held that the statute unambiguously provides for an exemption only in respect of one residential house and not many.

mostly its considred as a single house property

it is allowed because in the may 2010 same case is give like this 

Yes U/s 54F it is allow

No, Exemtion for 2nd House is not allowed.

As per Sec 54F,

Exemation can be given for the investment of consideration in House property i.e. One House.
 If the assessee purchase within 2 yrs or constructs within 3 yrs after the date of transfer any residential houseother than new asset, the exemtion will be withdrawn.


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