Eligibility for claiming capital gains exemption u/s 54 F

Last updated: 20 August 2008

Court :
THE Madras High Court

Brief :

Citation :

Eligibility for claiming capital gains exemption THE Madras High Court has held that in order to claim capital gains exemption under section 54-F of the Income-Tax Act, 1961 (that is, by investing in a residential house), it is not essential for the assessee to complete the construction of the house and occupy it; it would be sufficient if the assessee establishes that investment of the entire net consideration was within the stipulated period. The assessee had filed return of income claiming capital gains exemption under section 54-F of the I-T Act. The assessing officer (AO) rejected the claim on the ground that the investment made by the assessee of capital gains was in relation to construction of house which was not completed. The high court held that the assessee had purchased the land by investing the capital gains and had constructed residential house. The circular of CBDT does not stipulate that the construction should be completed in order to claim the benefit under section 54-F of the Act. Hence, the assessee was allowed capital gains exemption under the said section