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Nr - deduction u/s. 54 -construction on land of mother

509 views 4 replies

Nawaz

CA Final

195 Points Posted on 08 March 2014

Can you please provide me a clarification on Exemption u/s 54 - Assessee is an NR who sold a flat (LTCA) and is constructing a house on land owned in his mother's name - is he eligible for deduction u/s 54. If not, can he enter into an agreement with his mother so as to obtain partial ownership and claim exemption u/s 54 or is there anything that can be done so as to claim exemption u/s 54 Thank you.

Replies (4)

Z

Tax Consultation (US and India)

2970 Points Posted on 09 March 2014

Theres no problem,if conditions of s 54 are satisfied then exemption will be availed. Exemption is in regards to construction of residential house property. It would be better to get some ownership on it to avoid useless litigation. But as such theres no problem

Mihir

Wealth Manager

5293 Points Posted on 09 March 2014

You may avail exemption from LTCG if you construct another house before the end of 3 years.

Nawaz

CA Final

195 Points Posted on 09 March 2014

Thank you for the clarifications. I think it would be better to get a partial ownership just in case the dept. contents that ownership of the residential house should be there for claiming exemption u/s 54.

Z

Tax Consultation (US and India)

2970 Points Posted on 09 March 2014

Mr Mihir , there are now many case laws (some of them in links to my pro) wherein it was held that investment need to be done in specified time frame & its not necessary that construction should be completed within that time. @ Mr Nawaz there is absolutely no problem either way but ya having ownership would be helpful in avoiding litigations