Tax benifit under section 54

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

20 September 2014 Dear Sir / Madam,

My question is related to long term capital gain arise on sale of house property.

Mr. A sold his self occupied property and LTCG is Rs. 11,00,000/-

Mr. A is having another Property (35%share)with his daughter (65%share)

my question is can Mr. A invest his Rs. 11,00,000/- LTCG in same house property to increase his share 35% to 50% in said property and avail the tax benefit u/s 54.

i referred the following article :

"Purchase of portion of self-occupied house is also eligible for exemption- Section 54
nowhere states that a residential house which is purchased by the assessee so as to avail the
exemption should not be the one in which the assessee was residing. One cannot argue that
assessee is not entitled to exemption under section 54 merely because the assessee was residing
in the house which was purchased by him.Thus, where the assessee sold a house property owned
by her and out of the sale proceeds purchased 15 per cent share in another house property owned
by her husband and son, exemption was allowable even though the assessee was residing in the
said house prior to purchase, and continued to reside in the same house after purchase
- CIT v. Chandanben Maganlal [2002] 120 Taxman 38 (Guj.)."

Need Suggestion

Nikhil Kaushik

Nikhil Kaushik (Expert)
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20 September 2014 the case does apply to you. so you should get exemption..

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CA vandana goyal

CA vandana goyal (Expert)
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20 September 2014 as per sec 54 and refernce to this case law....Mr. A get exemption

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Querist : Anonymous

Querist : Anonymous (Querist)

20 September 2014 My confusion while reading the case,
the lady was not the earlier owner of the property. she was newly introduced for 15% share in a property which is already held by her husband and her son.

here in my case Mr. A is already owner of 35% share in a house, and from his LTCG from another property, he is going to purchase 15% more in a property, out of 65%, which is held by his daughter.(after this daughter and father will held 50% : 50% share in this property)

so the question raised, can Mr. A eligible to get Tax benefit of Section 54

Nikhil Kaushik

Nikhil Kaushik (Expert)
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20 September 2014 it doesnt matter. you are eligible..dont worry

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