Capital gains exemption in case of investment in a residential house property

The existing provisions contained in sub-section (1) of section 54, inter alia, provide that where capital gain arises from the transfer of a long-term capital asset, being buildings or lands appurtenant thereto, and being a residential house, and the assessee within a period of one year before or two years after the date of transfer, purchases, or within a period of three years after the date of transfer constructs, a residential house then the amount of capital gains to the extent invested in the new residential house is not chargeable to tax under section 45 of the Act.

The existing provisions contained in sub-section (1) of section 54F, inter alia, provide that where capital gains arises from transfer of a long-term capital asset, not being a residential house, and the assessee within a period of one year before or two years after the date of transfer, purchases, or within a period of three years after the date of transfer constructs, a residential house then the portion of capital gains in the ratio of cost of new asset to the net consideration received on transfer is not chargeable to tax.

The benefit was intended for investment in one residential house within India. Accordingly, it is proposed to amend the aforesaid sub-section (1) of section 54 so as to provide that the rollover relief under the said section is available if the investment is made in one residential house situated in India.

It is further proposed to amend the aforesaid sub-section (1) of section 54F so as to provide that the exemption is available if the investment is made in one residential house situated in India.

These amendments will take effect from 1st April, 2015 and will accordingly apply in relation to assessment year 2015-16 and subsequent assessment years.

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Category : Income Tax (28344)
Type : Articles (18232) Featured (4580)
Tags : Budget (1957) Budget 2014 (172) section 54 (155) Section 54F (183)

0 responses to “Benefit U/s. 54 / 54F available only if investment is made in one residential house situated in India”

  1. JAGDISH says:

    LAND PLOT PROPERTY SALE AMOUNT IS EXEMPTION AVAILABLE UNDER SECTION 54 OR 54F

  2. Dr.Pannalal says:

    IIf a senior citizen with three offsprings purchases three residential units as residential house,will exemption continue as permissible? To facilitate life of senior citizen,ican permission be given to invest total proceeds in three units(commercial/residential).If,so to whom to request?

  3. T S SRINIVASAN says:

    A resident with more than one house sells one house can exemption be claimed u/s 54 and sec 54F

  4. salman says:

    No exemption is avilable only fpr first residential property

  5. alkreddy says:

    For SECOND residential property is EXEMPTION AVAILABLE under SECTION 54 AND 54F

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