19 November 2022
HI there, If a person holds two separate residential units at one place converts into one unit (e.g.200 & 201) and at another place one more unit (e.g. 50) and subsequently sold the unit no.50 and invested the amount to purchase one residential plot from the proceeds, please confirm the amount of capital gain u/s.54 will be exempt or not.
Following conditions should be satisfied to claim the benefit of section 54.
The benefit of section 54 is available only to an individual or HUF.
The asset transferred should be a long-term capital asset, being a residential house property. Within a period of one year before or two years after the date of transfer of old house, the taxpayer should acquire another residential house or should construct a residential house within a period of three years from the date of transfer of the old house.
Tax payer should not own more than on residential house on the date of transfer.
19 November 2022
For exemption u/s. 54 of IT act, there is no such condition, so the exemption will be available provided you construct a house property within 3 years (from the sale of your residential house =50) over the plot purchased.
CAclubindia
