Exemption u/s 54 in Capital Gain.

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

05 February 2011 An assessee sells land for Rs. 10 lacs and his wife sells land for 40 lacs. They purchase 1 residential plot in their joint names for 50 lacs, husband contributes 10 lacs and wife contributes 40 lacs. On this land they construct a house for 10 lacs in which husband contributes 2 lacs and wife contributes 8 lacs respectively. Can both claim exemption u/s 54 from capital gains.

CA Jeen paul

CA Jeen paul (Expert)
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07 February 2011 yes both can claim exemption
u/s 54 exemption can be availed if the asessee purchases or constructs a residential house within a certain period. the word purchase should be taken in its ordinary meaning buying for a price. Here both parties have complied the above principle hence exemption available-CIT.v.T.N.Aravinda reddy (1974) 2 taxman 541(sc)