Query

Tax queries 301 views 2 replies

Priya Agarwal

Article Assistant

32 Points Posted on 15 February 2014

Hey Friends..

I have a query..

There is a couple. Husband have 3 house property, 2 of which he gifted to his wife. Then he sold a fourth fixed asset which is not a house property and gained a long term capital gain. Now he wants to claim exemption under sec. 54F. According to 54F, the assessee should not own more than 1 house property at the time of transfer of such assets, then only he can claim exemption. My ques is would the husband be considered as deemed owner of that 2 gifted house property or not??

Replies (2)

Swami Ayyappa Nuli

TAX ADVISOR & CONSULTANT AT G.S.T SUVIDH

1372 Points Posted on 15 February 2014

Under sec54F we have condition that he/she should not hold more than one residential property other than asset which is going to be acquired for claiming capital gain exemption,So what really determines whether he hold more than one residential property is matters.

A person is said to be hold more than one residential house when he is chargeable under the head income from house property i.e if he holds only one residential property,his income under the head is Negative.In your case as he gifted his houses to his wife,he is deemed owner and income there on is taxable in his hands as Income from House property,So he can not claim capital gain exemption under section 54F

Thank you,if you get clarified regarding this issue pls intimate me so that i can judge myself my assertions

CA SUKSHAM ARORA

569 Points Posted on 15 February 2014

I THINK HE CAN CLAIM EXEMPTION U/S 54F AS NOW HE IS NOT THE LEGAL OWNER OF THE PROPERTY, HE IS ONLY A DEEMED OWNER & THAT TOO U/S 22 AND U/S 54F NO SUCH CONDITION IS GIVEN.

PLEASE DO CLARIFY.

I WANT TO CHECK WHETHER I AM RIGHT OR WRONG