Sec. 54 of IT Act is applicable w.r.t sale of a residential property and investment in another residential property.What will be the consequence if a person owning 3 flats with separate door nos. (within the same compound) sells all of them and invests in a single residential property.Also explain the wealth tax perspective of this transaction.
2 Replies
CA VINAY BANSAL
(In job with KPMG)
(289 Points)
Replied 15 May 2008
The capital gain is to be invested in a single property. but the exemption will be applicable if the person is not having any other resedential property.
Rushikesh
(Chartered Accountant - Manager Finance)
(2375 Points)
Replied 15 May 2008
The Capital gain is allowed only if the peron sells one property and buys another (only one).
Even if the houses are in one compound they are seperate dwelling units as registered and hence seperate houses (unless they are used as one)
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