Residential Long term capital gains used in purchasing two residential flats in different locations during Financial year 2012/13

[Navin Thakkar]

Are there any Case Laws on the Subjects?

Are we eligible for deduction of costs of two properties from Long Term Capital Gains. u/s 54 of the Income Tax Act 1961?

[Surender Gupta]

The provisions of Section 54 as stood today allows exemption only for "one residential house in India". However, prior to Assessment year 2015-16, the exemption was available for "a residential house".

There are various case laws where exemption was allowed treating two joint property as single property and so on. Therefore, a detailed analysis of the factual position would help you to solve this issue.

AI Summary

Capital gains exemption for residential house limited to acquisition of a single house; factual characterisation may affect entitlement. Entitlement to exemption for long term capital gains reinvested in residential property depends on statutory scope and factual characterisation: the statute now limits exemption to acquisition of a single residential house in India, whereas earlier wording referred to a residential house, but case law has on occasions treated multiple jointly held acquisitions as a single asset, making detailed factual analysis determinative.