Chargeability U/s 54F
This query is : Resolved
20 January 2020
Dear Sir/ Ma'am
The query involves using of section 54F to claim exemption.
On the date of transfer of a plot, the assessee owns two residential houses. No income from house property is being earned from both the houses. As per my understanding of the section, the assessee can claim the exemption from paying LTCG by investing the same in buying a new residential house, if the assessee own more than one residential house but there is no income from the houses that can be charged under income from house property.
As per 54F, the LTCG on long term capital asset is not chargeable provided that nothing contained in this sub-section (1) of 54F shall apply where—
(a) the assessee,—
(i) OWNS MORE THAN ONE RESIDENTIAL HOUSE, OTHER THAN THE NEW ASSET, ON THE DATE OF TRANSFER OF THE ORIGINAL ASSET; OR
(ii) purchases any residential house, other than the new asset, within a period of one year after the date of transfer of the original asset; or
(iii) constructs any residential house, other than the new asset, within a period of three years after the date of transfer of the original asset; AND
(B) THE INCOME FROM SUCH RESIDENTIAL HOUSE, OTHER THAN THE ONE RESIDENTIAL HOUSE OWNED ON THE DATE OF TRANSFER OF THE ORIGINAL ASSET, IS CHARGEABLE UNDER THE HEAD "INCOME FROM HOUSE PROPERTY".
As per my understanding, both the conditions have to be satisfied for the LTCG to become chargeable. In the case discussed above, although the number of residential houses owned exceeds 1, but there is no income that can be charged under house property.
Kindly help me out with the same.
Thanks and regardsCA Anamika
The query involves using of section 54F to claim exemption.
On the date of transfer of a plot, the assessee owns two residential houses. No income from house property is being earned from both the houses. As per my understanding of the section, the assessee can claim the exemption from paying LTCG by investing the same in buying a new residential house, if the assessee own more than one residential house but there is no income from the houses that can be charged under income from house property.
As per 54F, the LTCG on long term capital asset is not chargeable provided that nothing contained in this sub-section (1) of 54F shall apply where—
(a) the assessee,—
(i) OWNS MORE THAN ONE RESIDENTIAL HOUSE, OTHER THAN THE NEW ASSET, ON THE DATE OF TRANSFER OF THE ORIGINAL ASSET; OR
(ii) purchases any residential house, other than the new asset, within a period of one year after the date of transfer of the original asset; or
(iii) constructs any residential house, other than the new asset, within a period of three years after the date of transfer of the original asset; AND
(B) THE INCOME FROM SUCH RESIDENTIAL HOUSE, OTHER THAN THE ONE RESIDENTIAL HOUSE OWNED ON THE DATE OF TRANSFER OF THE ORIGINAL ASSET, IS CHARGEABLE UNDER THE HEAD "INCOME FROM HOUSE PROPERTY".
As per my understanding, both the conditions have to be satisfied for the LTCG to become chargeable. In the case discussed above, although the number of residential houses owned exceeds 1, but there is no income that can be charged under house property.
Kindly help me out with the same.
Thanks and regardsCA Anamika
21 January 2020
Only one condition of owning not more than one house is applicable.
21 January 2020
It is AND kind of condition. In your case, since there is no income from the house property ( may be vacant or otherwise), you need to follow section 23(4). And by virtue of this section, your house property income is chargeable
21 January 2020
@ Anamika Ji
In section 54F, the wordings viz.,the income.......... is chargeable under the head
IFHP is used in clause (b) to the proviso of the section. This condition is applicable
only to the new house mentioned in clause (a)(iii) and not to the ORIGINAL ASSET
(here the existing two residential houses).
In other words, the view of Seethraman Ji is correct.
In section 54F, the wordings viz.,the income.......... is chargeable under the head
IFHP is used in clause (b) to the proviso of the section. This condition is applicable
only to the new house mentioned in clause (a)(iii) and not to the ORIGINAL ASSET
(here the existing two residential houses).
In other words, the view of Seethraman Ji is correct.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- REGARDING GST ON COMMERICIAL PROPERTY
- Is this income indian or foreign income?
- 15ca /15cb whose income tax login? remitter or nri seller's login?
- RCM applicability on Rent Paid by Registered Person to Unregistered Landlord for Residental Building
- TDS U/S. 194NF
- ITC temporary reversal and reclaim
- GST on export of services and Input Credit
- Regarding Documentation & Compliances for Opening of Unit of Pvt Ltd.
- Applicable TDS rate for sale of property in Nov 2024
- Can we claim ITC of Feb-2024 in the month of November-2024 which was not claimed by oversight
- Is online PGCE worth it?
- ITC c/f from FY2022-23 to FY2023-24 entered the same in table 8C of GSTR9 of FY 2022-23, in FY23-24
- Late filling fees Demand by gst office
- IGST Credit-Show cause notice issued-confusion
- Short and Excess provision of expenses
- Issue of gst e invoice
- Interchangeable words in accounts
- Adjusted profit/Loss in the case of LLP and Pvt. Ltd.company
- How to adjusted advances given or receipt
- Foreign vendor without PAN unable to to register due to non receipt of OTP on foreign number ?
Trending Online Classes
CAclubindia
