Section 54: capital gain invested in the name of spouse ?

This query is : Resolved

CA Dron Bharadwaj (Querist)
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12 June 2013 Question 1.
Mr. X sold his residential property and long term capital gain arose on it.

Can he claim the benefit of Section 54 by investing this capital gain in residential property in the name of :

1st Case - Spouse
2nd Case - Children

Question 2.
Is there any requirement that Mr.X should be co-owner in the new property for claiming benefit u/s 54 ?

CA Kapil Verma

CA Kapil Verma (Expert)
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12 June 2013 No sir, Mr. X can can't claim exemption u/s 54 until he invest money in his name.

If he became a part owner , then Investment amount is considered for his % of share in property, for the calculation of capital gain.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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12 June 2013 There is a decision in your favour by Karnataka High Court in
DIT V MRS. JENNIFER BHIDE 252 CTR 444

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CA Dron Bharadwaj

CA Dron Bharadwaj (Querist)
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12 June 2013 Sir
In the case law mentioned above, the assessee had purchased the property in her name with his husband as co-owner.

I want to ask whether the benefit of Sec 54 will be available if the assessee purchases the property in the name of spouse only. (Payment made by assessee) ?

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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13 June 2013 Another favourable decision u/s 54F
CIT Vs. Kamal Wahal [2013] 30 taxmann.com 34 (Del)