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Section 54 of IT

Ravi (AGM) (47 Points)

19 September 2024

For section 54 which date would be considered for exemption - allotment, possession or Registry date?

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Rama chary Rachakonda (Master in Accounts & Lawyer email ID:ramachary64@gmail.com voice no:9989324294) (4261 Points)
Replied 19 September 2024

For Section 54 of the Income Tax Act, 1961, the date considered for exemption is the date of transfer of the property, which is typically the date of registration (registry date) of the sale deed. Section 54 provides exemption from capital gains tax if the assessee invests the gains in a residential property within a specified timeframe. The exemption is available if the assessee: 1. Invests in a new residential property within one year before or two years after the date of transfer. 2. Constructs a new residential property within three years from the date of transfer. The date of transfer is crucial in determining the exemption. The Supreme Court has clarified in various judgments that the date of registration (registry date) is the date of transfer for the purpose of Section 54. The allotment date or possession date may not be relevant for Section 54 purposes, as the property transfer is complete only after registration.

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