Exemption under Section 54-capital gain

[VENKAT S]

If a person has multiple houses (eg: four) and sells one of them and reinvests in another house, can he claim relief under sec 54 of the Income tax Act?

Is there any condition that he should not hold more than one house (like in sec 54F)?

[Ashwani Garg]

Yes, the exemption under section 54 would be available on purchase of ONE residential house. In case, more than one residential house are purchased, the one having the highest price could be considered for the purpose of the above section.

[Ashwani Garg]

The conditions laid down in section 54F regarding ownership of multiple houses is different and should not be mixed with section 54.

AI Summary

Capital gains exemption under section 54 limits relief to purchase of one house; if multiple bought, apply to highest-priced. Exemption for capital gains under Section 54 is available only on purchase of one residential house; if more than one residential house is purchased the one with the highest purchase price may be considered for the purpose of claiming the exemption, and ownership conditions under other multiple house rules are distinct and should not be mixed with Section 54.