Sec 54 Exemption

Originally posted by : Nandu
	Request you to pls respond.... Mr.A has sold a house property worth 10lakhs.  within 3 years from the date of transfer he has constructed an additional first floor (in the building used for his residence). the first floor is seperate and intended to let for rent. can he claim exemption under section 54 for capital gain arising from the sale of house property??

Letting out property dosent amount to transfer of property ! As per section 54 to claim exemption the new property should not be sold for 3 years.So, I geuss Mr.A can very well claim the exemption.

I think my question was not clear for you...

my doubt is that the assesse has constructed first floor in the existing building.. can that be considered as "construction of new house property" according to section 54..?

Yes