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Capital Gains Exemption 54/54F

Sameer (Article) (124 Points)

21 October 2021

Assessee has sold residential premises. Can he invest the proceeds by purchasing residential premises in name of his wife and claim exemption?

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5 Replies

prasad Nilugal ( GST Practitioner & Accounts ) (14536 Points)
Replied 21 October 2021

Section 54/F of the Income tax act 1961, applicable to Assets other than residential property just confirm .

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Sameer (Article) (124 Points)
Replied 21 October 2021

Yes, investment is done in 54 only. But does proceeds of sale invested in the name of wife constitutes exemption?

Kev Men (756 Points)
Replied 22 October 2021

As per the bare Act, the word 'assessee' is used. Hence claiming exemption by using the proceeds in the name of wife is not suitable. However there are caselaws wherein the source being in the name of the assessee and the wife not having any income to purchase the new property...if the link is established can be useful in claiming exemption.
It is advisable to consult an expert in person to get legal clarity on the same as caselaws may differ based on jurisdiction and facts.

Sameer (Article) (124 Points)
Replied 22 October 2021

Their is a Delhi ITAT Ruling in a similar case. Are rulings of ITAT Jurisdiction Specific?

Kev Men (756 Points)
Replied 22 October 2021

Yes...It is specific to Delhi. It will be better to have either Supreme Court decision or High court Decision of your jurisdiction or ITAT decision of your jurisdiction.