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Exemption u/s 54F of Income Tax Act

CA. Vipul V. Garg (Chartered Accountant) (67 Points)

03 April 2010

Hello Everyone,

I want to know that if any person has sold his plot of land in any previous year and claims exemption u/s 54F and than invest the amount in time limits prescribed u/s 54 in any other new plot of land property in name of his Wife then will the exemption be allowed on it or not. Moreover if that individual shows that he has gifted the property to his wife then what will be the tax treatment in the hands of Husband and wife. Please solve my query. If there is any Reference Case Law or Section or any Ruling then please do quote that also I'll Be highly obliged to you.

Thanks And Regards.

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CA bhargava (CA) (2017 Points)
Replied 15 October 2010

Boss...

Regards to above Referring to 54F, The new asset is to bee Invested in the Residential house but not Plot, but still there is a conflict that with out purchasing the land we cant construct the house.... so in my view exemption is allowable....

And refering to the Registration , It should be on u r name or By u and u r spouse. But your Spouse alone is registered then 54 F is not applicable to u and irrespective of investment taxable to u...

And again coming to the part of Gifting the asset to u Spouse, First it should be registered in u r name,

and Sec 56(2)(vii) is not applicable as it is between the relatives.