Definition - residential house with reference to section 54f

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Dhinesh (Querist)
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31 July 2013 Dear experts,

A person having 2 House property (suitable for commercial let out) and 1 plot. He let out the 2 House properties for commercial purpose.

Now he sells the plot and invest the money in residential house.

whether he eligible for getting exemption u/s 54F.

Because in the section 54F, it has been mentioned that Not having More than 1 Residential House at the time of transfer of the original asset.

The person is not having Residential House at the time of transfer of Original asset, he is having only Commercial let out property.

Note : Now the person is staying in his spouse house.

kindly clarify me.

sudarshan

sudarshan (Expert)
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01 August 2013 the section says owns more than 1 residential house and NOT residential purpose. House let out for commercial purpose can also be residential house. One can claim exemption if some one owns commercial building or complex and not residential house let out for commercial purpose.

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Dhinesh

Dhinesh (Querist)
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01 August 2013 One of the property is a commercial complex (V.R.S Complex - having lot of units only one unit is belongs to the assessee) and another one is house property let out for commercial purpose.

then he can claim exemption under section 54F.

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C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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31 August 2013 Yes in your case as you do not have any residential house you can claim Section 54F for purchase of the residential house.

Now, how you will prove that the existing is not a residential house? You better take a photograph where you can find some Sign Boards are appearing of various companies and at the same time your agreement for letting out also gives the proof of commercial nature and accordingly you can use the sale proceeds of the commercial building for your residential building.