17 February 2016
any possible to claim in sale of more than one long term capital asset (land and building) and purchase of new residencial house property ... as your reply quick as possible
17 February 2016
Section 54 of the Income Tax Act speaks of long term capital gains on sale of A house property being a residential house. Section 54 F sale of any asset other than A house property.
From a reading of both these sections, and applying the normal rules for interpretation of statutes it is apparent that the exemption is available only for a single long term capital asset. Further the investment has to be in the purchase of a new residential house in the same year or construction thereof within 3 years. While the Income Tax Act permits two properties to be treated as Residential houses, the general clauses act defines a residential house as a dwelling unit where the person usually resides. Therefore, the investment can be in only one residential house and the quantum of capital gains is to be computed on transfer of a single house property or any individual asset other than a residential house.
Therefore it is not possible to invest the LTCG of a number of assets in a residential house and claim the benefit of exemption of Section 54 / 54F of the Income Tax Act, 1961.
CAclubindia
