Mr. Bruce Wayne recently sold an urban plot of land for ₹1 crore, resulting in a long-term capital gain of around ₹50 lakh. He owns only one residential house in his own name.
He is now planning to purchase a flat currently owned by his son, Mr. Iron Man, using the entire sale proceeds. The flat was originally purchased by the son more than a decade ago. The proposed sale value is ₹1.20 crore, while the current circle rate of the flat is about ₹1.10 crore.
Mr. Bruce Wayne intends to claim capital gains exemption under Section 54F of the Income Tax Act. The transaction will be done through proper banking channels at a fair price, and both father and son will declare the same in their respective returns.
The questions are:
1. Can a father validly purchase a residential flat from his son and still claim exemption under Section 54F, if the consideration is paid in full and at market rate?
2. Will such a transaction be treated as genuine by the Income Tax Department if proper documentation, bank trail, and valuation reports are maintained?
3. Is there any legal mechanism—such as an advance ruling or prior declaration—to obtain confirmation from the tax authorities in advance, so that no notice or dispute arises later?
Please suggest steps to be taken as it's a genuine transaction.
Insights based on recent case laws or professional experience would be very helpful.
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