I have a question regarding exemption under sec 54, my assesse have a residentioal house and he have purchase now another new house in another city, and shifted to that city. He had brought this new house by taking loan fro bank. Now he is going to sale that old house, and repay the loan taken from bank for purchase of new houe. My question is whether exemption can be taken under sec 54 under this condition????
12 Replies
CA Manish
(Job)
(5264 Points)
Replied 08 October 2012
Please provide the relevat dates because exemption u/s 54 is available only for long term capital gain.
CA Pooja Agarwal
(Chartered Accountant)
(3228 Points)
Replied 08 October 2012
yes,if the duration between the purchase of new house and sale of new house is not more than one year
Hiren Bhandari
(CA Practise)
(93 Points)
Replied 08 October 2012
yes duration is not more than one year. And it is long term capital gain.
Hiren Bhandari
(CA Practise)
(93 Points)
Replied 08 October 2012
thanx pooja for your reply. Can you give any reference to suport your ans. I also believe this only but did not getting any reference...
CA Pooja Agarwal
(Chartered Accountant)
(3228 Points)
Replied 08 October 2012
refer section 54 of income tax act
Hiren Bhandari
(CA Practise)
(93 Points)
Replied 08 October 2012
thanx manish.... can u give any reference or any case support
CA Manish
(Job)
(5264 Points)
Replied 08 October 2012
Extracts of sec 54
(1) Subject to the provisions of sub-section (2), where in the case of an assessee being an individual or a Hindu undivided family, the capital gain arises from the transfer of a long-term capital asset, being buildings or lands appurtenant thereto, and being a residential house, the income of which is chargeable under the head "Income from house property" (hereafter in this section referred to as the original asset), and the assessee has within a period of one year before or two years after the date on which the transfer took place purchased, or has within a period of three years after that date constructed, a residential house, then, instead of the capital gain being charged to income-tax as income of the previous year in which the transfer took place it shall be dealt with in accordance with the following provisions of this section, that is to say, - (i) If the amount of the capital gain is greater than the cost of the residential house so purchased or constructed (hereafter in this section referred to as the new asset), the difference between the amount of the capital gain and the cost of the new asset shall be charged under section 45 as the income of the previous year;
Hiren Bhandari
(CA Practise)
(93 Points)
Replied 08 October 2012
but issue is that whether paying for loan is also treated as paying for new house.
ANUBHAV VISHNOI
(-)
(150 Points)
Replied 22 November 2012
Definitely hiren exemption u/s 54 is available in this case also.
Law does not require the identity of the amount received on sale and its utilization for the purpose of section 54. That does not matter if laon has taken for purchasing the new house and after that old house is sold out. Intention is whether assessee has purchased a new house within the time frame. So you can enjoy the tax exemption.
I hope this will help you.
GiriRaaj
(Articleship Traing )
(162 Points)
Replied 30 November 2012
| Originally posted by : Hiren Bhandari | ||
 |
the issue is still open...... |
 |
he will get exemption u/s 54 , coz its clearly written
time limit for purchase
within 1 year before transfer date
within 2 years after transfer date
as per my knowledge he wil definately get exemption
thanks :)
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