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Can section 54 and 54f be claimed in the same financial year on two different properties?

Malavika (Student) (21 Points)

15 September 2018

Sir,

A person sold a house property on 15-9-2017 and purchased another house using the sale consideration on the same date.He claims exemption under section 54 on the above property(he owns only this property as of now) and his taxable capital gain after exemption is Rs1484400. He also sold a plot of land on the same date i.e.,15-9-2017, the proceeds of which was used to purchase another house on 26-3-2018 for which he has claimed an exemption u/s 54F.His taxable capital gain on the above sale is Rs 1762431.

Can section 54 and 54F be claimed in the same Financial Year on two different house properties?

Or does the amendment of claiming exemption on only one house property apply to this case too ?

Pease clarify sir.

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3 Replies

Gopal Chandu (Freelancer with intelligence agencies ) (113 Points)
Replied 15 September 2018

Well, that depends on whether you want to sell the second house immediately or 20 years down the line. The Capital Gains tax amount on the first house is valid but you have to ask yourself, would you ever be able to buy a house in the same city again. Why not go for two houses which have 92 years of life. Bungalows built these days start leaking roofs in 15 years.

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jayadevan (Auditor) (62 Points)
Replied 15 September 2018

Where tjhe investment is made in more than one residential house in different locations or cities exemption shall be restricted to any one residential house u/s 54 at the option of the assessee.It needs mentionthat in case of exemption under section 54F, if an assessee invests in more than one residential house ,the condition of restriction on purchase within 2 Years or construction within 3 years of any residential house o ther than the new asset will be violated .Hence ,exemption shall be denied u/s 54F.

JAYADEVAN K.N. CA

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Ashwin Kumar (1234 Points)
Replied 15 September 2018

malavika actually i like the question first of all you should clearly understand section 54 and 54f.

under section 54 to claim the exemption:

1. the property sold must be a residential house property

2. the gain must be a long term capital gain

3. income arising from the property must be taxable under the head house property

4. it is the only property held by the assessee

in the first transaction you can claim section 54 provided a house property was purchased one year before the date of transaction, 2 years after the date of transaction or constructed within 3 years from the date of transaction. Then only you can claim the benifit of section 54. However there is a restriction in section 54 that the said house property on which you have calimed the benifit should not be sold for a periode minimum of 3 years. If done so the said capital gain should be reversed and tax should be paid.

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