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Capital Gains Sections 54 and 54F

Capital Gains Sections 54 and 54F

     Issues of Capital Gains u/s 54, 54F

  1. Investment in multiple houses – Whether benefit is available u/s 54 of the Act.

POSER/OFFSHOTS

  1. ADJACENT AND USED AS A SINGLE HOUSE .
  2. NOT ADJACENT BUT IN THE SAME BUILDING OR SOCIETY.
  3. THOUGH ADJACENT BUT NOT USED AS A SINGLE UNIT.
  4. IN DIFFERENT BUILDING OR SOCIETY.
  5. IN TOTALLY DIFFERENT LOCALITY OR DIFFERENT PARTS OF CITIES OR DIFFERENT CITIES.
  1. Booking of under construction flat – whether considered as purchase or construction (Period of 2 years or 3 years to be considered )
  1. Expenses incurred on construction post purchase of a house- Whether benefit of sec. 54 and 54 F is available on these expenditure .
  1. When the New Residential House can be said to be purchased/constructed.
  1. Consequences where construction cannot be completed within the time specified

5A. Whether the Registration of the new house is essential for claiming  exemption ?

  1. Purchase of house outside India – Benefit u/s 54 is available ?
  1. Purchase of Residential house in joint names with family members and purchase of house in the names of family members only
  1. Original asset shall be a residential house
  1. Land appurtenant to a residential house . Which land needs to be considered ?
  1. Flat acquired in a scheme of redevelopment. Whether benefit u/s 54 is available?
  1. Purchase of part of the house which is already partly owned by assessee?
  1. Whether the exemption is available under both the sections in respect of the investment made in the same asset.

SECTION : 54

  1. Rajesh Keshav Pillai vs ITO(Mum) Tribunal
  • FACT:
  • Capital Gains – Profit on sale of property used for residence – Exemption is available to multiple sales and purchases of residential houses – (S 45).
  • Capital gains – Exemption – Sale of two or more houses and investment.
  • Source: www.itatonline.org.
  • The decision of the special Bench in ITO vs. Sushila Jhaveri (2007) 292 ITR(AT)1 is distinguishable.
  • Though section 54 refers to capital gains arising from ”transfer of a residential houses”, it does not provide that the exemption is available only in relation to one house. If an assessee has sold multiple houses, then the exemption under section 54 is available in respect of all houses if the other conditions are fulfiled. If more than one house is sold and more than one house is bought , a corresponding exemption under section 54 is available. However , the exemption is not available on an aggregate basis but has to be computed considering each sale and the corresponding purchase adopting a combination beneficial to the assessee.
  1. ACIT v Deepak S Bheda 52 SOT 327 (Mum)(2012).( Tribunal)

     FACT:

Capital Gains – Investment in bonds – Exemption -Investment out of total capital gains in REC bonds, deduction         cannot be denied on the ground that the assessee has availed the exemption u/s 54F also against a part of the               capital gain

Capital Gains Sections 54 and 54F

Capital Gains Sections 54 and 54F

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