Exemption under section 54f

Hi.

Mr.X has made an Long Term Capital Gain on sale of Land for Rs.9,20,000/- during the FY 2015-2016.

Can Mr.X claim exemption under Section 54F in the following circumstances:

Mr.X already has constructed the property (Ground Floor) in the FY 2009-2010.(Buiding Plan date:04.12.2008 Plan perod:04.12.2008 to 03.12.2010)

Now.Mr.X intends to construct First Floor in the property.

Query:

1.Whether Construction of Additional Floor qualifies for exemption under section 54F?

2.Building approval for the same has to be renewed?

3.Case Law in support of the above claim?

Thanks.

 

 

 

Replies (1)

Well in  Addl. CIT Vs. Vidya Prakash Talwar (1981) it is held  House Property does not mean a complete Independent House. It includes residential units also, like flats in a multistoreyed
complex

futher held held that the residential house should be interpreted as residential unit as applied
in sections 22 to 27. If any independent unit is constructed then that will tantamount to construction of a new residential house.

therefore , if the first floor is capable of being used as an independent residential unit ,
then an exemption u/s 54F is available
.

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