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Sec. 54F Deduction

26 July 2019

If a person sale a plot which is in joint name with his spouse and invest whole sale consideration in purchase of a house in joint name with his spouse whether deduction u/s 54F is allowable or not pls reply.

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4 Replies

Ramakrishna Nayak (8 Points)
Replied 26 July 2019

It is allowed, provided that you bifurcate their individual share in the property and show it separately in their respective returns.

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CA ABHAY GUPTA (Practice) (3230 Points)
Replied 26 July 2019

yes it is available, subject to the condition that on date of transfer of plot they have one residential house property and after that they only have another house property for which they are claiming deductions u/s 54F.

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DEVI SINGH PARIHAR (PARTNER) (9 Points)
Replied 26 July 2019

Sir whether this couple can get benefit of this section 54F again if after 2 years they sold another land having in joint name and purchase a new house in joint name and they have only one residential house jointly purchaesed at the time of sale of land pls reply.

Suresh Thiyagarajan (Student) (3986 Points)
Replied 26 July 2019

1. Sec 54F contemplates a condition that an assessee should have not more than one residential house property at the time of claiming exemption u/s 54F.
2. In your first case purchase of a residential property will be allowed as deduction u/s 54F since this is your first residential house property. After 2 years you both still will be holding one residential property and hence again sec 54F can be used for claiming an exemption on the sale of land.
3. It will be allowed to claim exemption u/s 54F on sale of another land after 2 years.
Please correct me if the above solution has an alternative view.