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Sec 54 exemption

06 January 2021

can I use money deposited in capital gain scheme account for the construction of existing residential House means renovation etc.

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6 Replies

CA. Sourav Sarkar (Chartered Accountant ) (24588 Points)
Replied 06 January 2021

There is no tax exemption on capital gains spend on renovating house – Here is the reason
As per Section 54 of Income Tax Act, any long term capital gain arising from the sale of a residential property shall be exempt to the extent such capital gain is invested in the purchase of another residential property within one year before ortwo years after the due date of transfer of the property sold or construction of residential house property within a period of three years from the date of transfer/sale of property.

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PARVEEN DAHIYA (181 Points)
Replied 07 January 2021

We can construct residential house. is it possible that 1st floor construct on existing house?????

Kapadia Pravin (17264 Points)
Replied 07 January 2021

You have to justify your step. it appears to be possible to get 54 advantage

PARVEEN DAHIYA (181 Points)
Replied 07 January 2021

Is it justify that 1st floor constructed

Krishna Chaudhary (Accountant) (4531 Points)
Replied 09 January 2021

Yes you can

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PARVEEN DAHIYA (181 Points)
Replied 09 January 2021

Krishna @ r u sure sir that I can use money for construct 1st floor of existing residential house for getting exemption u/s 54. plz check and conclude. thanku