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Section 54 availed by Woman with gifted property

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Archit Jain

Student

37 Points Posted on 10 September 2023

Suppose a husband gifts a residential property to his wife. The wife subsequently sells the residential property and buys another residential property within 10 days.
Question- 1- Will section 54 be availed by the wife?

2- Whether stamp duty exemption be availed by Woman on the sale of gifted property?

Replies (3)

Quick Summary

This discussion explores whether a wife can claim tax exemption under Section 54 of the Income Tax Act when she sells a residential property gifted by her husband and purchases another within 10 days. The consensus suggests Section 54F is applicable, provided the new property's value meets the criteria. It also addresses stamp duty, indicating that a specific exemption is unlikely, though it might be considered part of the cost for Section 54F purposes.

Ashwin Kumar

CA ipcc

315 Points Posted on 11 September 2023

1. yes, you can avail 54f however the value of the new property should not be less than the gross receipts recieved on sale of the old property.

2.i think stamp duty exemption cannot be availed. however the same can be included in the cost of the new building purchased for the purpose of exemption under section 54f

sabyasachi mukherjee

Profession

19978 Points Posted on 12 September 2023

Seems quite ok.

Aashok Kumar Sharma

Finance/Compliance Consultant

77866 Points Posted on 07 November 2026

Yes, the wife can claim Sec 54, but clubbing complicates it:
• The wife selling a residential house gifted by her husband: capital gains arise. The cost and holding period are the husband's (Sec 49(1), 2(42A)).
• Clubbing: Sec 64(1)(iv) clubs income from assets transferred to the spouse without adequate consideration, including capital gains on the sale of the gifted house, with the husband's income. The gain is taxed in the husband's hands.
• Sec 54 exemption: since the gain is computed and clubbed, the exemption can be claimed if the new house is bought within time. Tribunals have allowed 54 where the reinvestment is in the transferor's or the wife's name, with the clubbed computation. Ideally, buy the new house in the wife's name, since the asset was hers.