Exemption u/s 54 not to be denied due to delay in completion of project beyond the control of assessee


With difficulties being faced by the Real Estate Sector business (due to delay in clearances, nonavailability of finance and a sluggish demand) numerous projects are delayed in execution. As a result, an assessee who has sold a house and invested in another flat which is under construction by a builder /developer and is to be completed within the time limit prescribed u/s 54, is being denied exemption for no fault on his part.

Budget 2018 Suggestion by ICAI

  • It is suggested that where substantial part of the consideration of the new flat has been paid, but completion of construction has been delayed for reasons beyond the control of the assessee; exemption u/s 54 may not be denied.
  •  Suitable safeguards to prevent misuse of such provision may be incorporated in the statute. However, hardship caused to genuine home-buyers, should be alleviated.
Source-  ICAI Pre-Budget Memorandum–2018 (Direct Taxes and International Tax)

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Category : Income Tax (28576)
Type : News (14091)
Tags : Budget 2010 (170) ICAI (2777) section 54 (157)

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