Exemption u/s 54F

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

29 August 2010 My client has earned LTCG by selling a residential house. Now he is investing all LTCG to buy a new HP.
Can he get exemption u/s 54F if he buys the new HP in his wife's name.
His wife is also filed her return yr to yr independently.

Aditya Maheshwari

Aditya Maheshwari (Expert)
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29 August 2010 No he cannot get. Exemption will be allowed only if gains invested in own name. Even joint name would do.

Some planning can be done i. e. purchase the house now in his own name and then gift the house to his wife after holding he same for 3 years if the client wants the name on the flat of his wife.

Otherwise tax would be leviable in the hands of the husband.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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29 August 2010 Investment in new house property for claiming exemption under section 54F should be in assessee's own name. Where it is in the name of assessee's wife, the requiremnet of the said section is held not satisfied.
Citation : - ITO V Parkash Timaji Dhanjods (2002) 258 ITR 114 (Nag).

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mohinder kansal

mohinder kansal (Expert)
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29 August 2010 but if long term capital gains is from sale of house property, deduction under section 54F is not available. it will be available in under section 54 and only amount of capital gains can be invested in new house. deduction u/s 54F is allowed in case LTCG is earned from asset other than residential house. however, investment in new house shall be in asseessee's own name and not his wife name

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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30 August 2010 In such cases where a husband desires to purchase a house in his wife's name, he can gift the old house to her. Period of holding of previous owner is included in case of gift or will. Pl refer Section 47(iii)

mohinder kansal

mohinder kansal (Expert)
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30 August 2010 in this case stamp duty as applicable on the circle rate shall be payable

CMA Arif Farooqui

CMA Arif Farooqui (Expert)
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31 August 2010 exemption u/s 54 F is not available to him as transferred capital asset is residential house property. he can claim exemption u/s 54.Exemption will be allowed only if gains invested in own name.