Exemption under sec. 54 and 54F


Exemption under sec. 54 and 54F

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Exemption u/s 54 and 54F to be allowed in case of investment in one residential house property only situated in India

Exemption u/s 54 and 54F to be allowed in case of investment in one residential house property only situated in India [Section 54 and 54F] [W.e.f. A.Y. 2015-16)]

 

The existing provisions contained in section 54(1), 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.

 

The existing provisions contained in section 54F(1), 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 following issues were always debated and there have been contrary judgments in this regard:

 

1.      Can an assessee acquire more than one residential house to claim exemption under section 54?

 

2.      Can an assessee acquire a residential house outside India to claim exemption u/s 54 or 54F, as the case may be?

 

 

Some of the judgments which have been pronounced with regard to issue No. 1 are as under:

 

 

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