Section 54

Tax planning 851 views 5 replies

Sonam Gulati

38 Points Joined February 2010

Hi All,

Need a urgent help on this matter. If a person has a plot registered on his mom's name and one property registered as co-owner on mom's name and son's name. Now if they want to sold out these two properties. Can the amount recovered be invested in purchasing two or three properties ? And capital gain exemption will be available for all the two or three properties or not ? Or whether the exemption u/s 54 F will be available for only one property ? Please help me on this issue. Kinly quote a supreme court case if possible regarding this.

Warm Regards,

CA Sonam Gulati

Replies (5)

Sumit Grover

Chartered Accountant

3652 Points Joined September 2008

You cannot avail the exemption u/s 54F for all the properties to be acquired....Provisio to section 54F clearly prohibits such a situation

TKKKKKK

PRACTICING CA

3272 Points Joined June 2010

you can get deduction for one house by purchasing one house only...

Neha sharma

1257 Points Joined February 2012

There is no clarity in law whether you have to invest all cap gains in 1 house or more than 1 house

And in such a case, different people are taking out different interpretations..

Mihir

Wealth Manager

5293 Points Joined December 2008

https://www.itatonline.org/forum/index.php?topic=428.15

Shivang Chokshi

C A

182 Points Joined April 2008

as per your question it seems that there are two properties.. one on mother's name and other on joint name.. thus you can sell properties individually and buy another property on that name.. 54F talks about buying one house if you do not have a house or second house considering you do not have more than one house. thus sell property in a way that you do not have more than one house at any time. sec 54 talks about sell a house and buy a house.. thus you can make as many transactions you want by selling a house and buying a house. regarding the question of buying multiple properties after selling one property at a huge price, then there are judgments supporting also and against it also.. generally the revenue is on a positive note in such cases.. eg: a person shifting from mumbai to ahmedabad selling his mumbai flat for about 6cr and buying a flat in ahmedabad for 1.5cr and another land for making house for 1cr will normally be accepted !