section 54F

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Kiran

Partner

148 Points Posted on 09 November 2018

Hi,
Mr.X own properties as below

Property A which is residential property and rent recieved is filed under Income from house property.

Property B which is commercial property and rent received is filed under Income from house property..

He stays at his son's house..which is none of above property

Mr.X to sell Property B ( commercial)and buy another residential property C for self occupancy

Now he on the date he owns 2 residential property i.e A and C,will he be àble to claim deduction under sec 54F.. the rule says he should not have more than one residential property other than the new one and there should not be income for house property.

He will be still getting rent from resident property A

plz guide

Replies (2)

Manish Manu

198 Points Posted on 09 November 2018

The conditions of Sec 54F are stated hereunder:

"Provided that nothing contained in this sub-section shall apply where—

[a] the assessee,—

[i] owns more than one residential house, other than the new asset, on the date of transfer of the original asset; or

[ii] purchases any residential house, other than the new asset, within a period of one year after the date of transfer of the original asset; or

[iii] constructs any residential house, other than the new asset, within a period of three years after the date of transfer of the original asset; and

[b] the income from such residential house, other than the one residential house owned on the date of transfer of the original asset, is chargeable under the head "Income from house property"."

Here Original Asset = Property B and New Asset = Property C

Now as on the date of Sale of Property B, Mr. X owns one property i.e. Property A other than Property C, so condition 1 is specified.

Further with regard to 2nd condition, Mr X will not be having any income from property C and as such even the 2nd condition is fulfilled.

Thus, in my opinion, Mr. X is eligible for exemption u/s 54F provided all other conditions are satisfied.

For any further clarification, feel free to mail me at mnshdugar @ gmail.com