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regarding 54f

kapil (article) (33 Points)

09 September 2019

if assesse owns two vacant plot and one flat
and now he wants to sell one plot and purchase another flat can he claim 54 f deduction

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12 Replies

Pranav Aggarwal (469 Points)
Replied 09 September 2019

Yes, you can claim exemption in 54F on sale of one plot and purchase another residential flat within 2 years from date of transfer.

kapil (article) (33 Points)
Replied 09 September 2019

that means vacant land (plot)is not included in the definition of residential house

Pranav Aggarwal (469 Points)
Replied 09 September 2019

yes not included in residential house

Kapadia Pravin (17249 Points)
Replied 09 September 2019

@ Kapil
Yes surely an assessee can claim deduction under section 54F.

However
If the entire sale proceeds of plot is not invested and only a part of the sale consideration of plot is invested, then the 54F benefit shall be proportionately allowed.

sabyasachi mukherjee (26124 Points)
Replied 10 September 2019

pravin u are wrong.
sec 54ec applies to a different section.

Kapadia Pravin (17249 Points)
Replied 11 September 2019

Please address your views to the querist .

sabyasachi mukherjee (26124 Points)
Replied 11 September 2019

please address my views to the querist.

Suresh Thiyagarajan (Student) (3986 Points)
Replied 11 September 2019

1. Sec 54F comes into place only when there is a sale of a capital asset other than residential house and subsequently purchase of a residential house, then the same will be allowed as exemption u/s 54F.
2. However, the exemption u/s 54F will be in proportion to the sale consideration and investments made. (SC/Invest)
3. In your case it is a sale of a vacant plot which is not a residential house and subsequently purchased a residential house, thus it will qualify for exemption u/s 54F.
4. Make sure the purchase was made within a period of 2 years from the date of sale.
Please correct me if the above solution has an alternative view.

Rittick Agarwal (37 Points)
Replied 13 September 2019

II think he can't claim 54F because he owns one flat already so as per provision he cannot hold 2 residential house on the date of transfer

1 Like

Asrar Rhatwal (Professional ) (12 Points)
Replied 21 September 2019

Yes, Mr Rittick Agarwal is right on the date of transfer the assessee should not own more then one residential house

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Suresh Thiyagarajan (Student) (3986 Points)
Replied 21 September 2019

1. One of the pre-condition for claiming exemption u/s 54F is that assessee should not own more than one residential house at the time of transfer of original asset.
2. In this case, you own only one residential house and thus satisfy the condition of "not more than one residential house".
3. Exemption u/s 54F can be claimed in this case, proportionately to the investment made in the new residential house.
Please correct me if the above solution has an alternative view.

1 Like

Kapadia Pravin (17249 Points)
Replied 21 September 2019

No house condition was there in 54F but upto AY 2019-2020.

In last Feb interim budget this condition of 54F has been relaxed and now from AY 2020-2021, even if you own one residential property , you can take benefit by purchasing second residential house.