15 July 2009
Mr Mukherjee sells a resdential house property of a long term capital gain of Rs1,50,000. He invest Rs 1,00,000. within three years in construction of the first floor and barsati(to be used residence)to another house owned by him since 1949.is Rs 100,000. exempt from tax under Section 54. Pls clarify regarding this. Thanks GIRISH
15 July 2009
1. As the assessee has constructed the new house i.e. first floor , therefore entitled to deduction of Rs. 1.00 lac u/s. 54F. 2. Rs. 50,000/- incurred towards construction of Barsati of old house would not be entitled for deduction as it is not the construction of new house.
15 July 2009
If an assessee sold out his residential property and invested the capital gains with in the stipulated time in the construction of a new floor on another house owned by him, then he is entitled to exemption u/s 54 of the Income tax Act,1961.
Citation :- CIT Vs. Narasimhan (1990) 181 ITR 101 (Mad).
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