Property in the name of wife is sold and the new property is purchased in the name of husband and wife for constructing a house. In this case, is it possible to claim exemption u/s 54F
Suresh Thiyagarajan
(Student)
(3986 Points)
Replied 21 July 2019
1. As per sec 54F exemption will be available for a sale of a capital asset and purchase residential house property within a specified period.
2. The above section says that an assessee should have purchased within 2 years after or 1 year before the date of sale or constructed a residential property within a period of 3 years.
3. The provision clearly says assessee should have purchased or constructed. From a plain reading, it can be said the house property should be in the name of the assessee.
4. But referring a case law Shri Vivek Jain Vs. DCIT (ITAT Jaipur) where the decision was in favor of the assessee where the sale consideration of a capital asset was used to purchase a property in his wife's name. The exemption cannot be denied merely because the property was purchased in assessee's wife and exemption provisions are to be interpreted liberally and not from a strict angle.
5. In conclusion, based on the above case law exmeption, u/s 54F will be available even if the property was purchased in the name of his wife.
Please correct me if the above solution has an alternative view.
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