Section 54F

[Ethirajan Parthasarathy]

A owns

One residential house and

One site.

A sells the house on 19/04/2021 and to off sets the Capital Gain by investing the required amount in another residential house on 30/6/2021 (section 54).

On the 15/6/2021 he sold the site and purchased another residential house on 30/12/2021 (section 54F)

As per provisio to section 54F (1), exemption available under that section will be denied if assesse invests in additional residential house with in one year after sale of site.

The word used is “Additional”. In this case the (section 54), new house was purchased first. Whether this house will fall with the meaning of “Additional” house even though bought before the purchases of second house (section 54F).

AI Summary

Clarification on Section 54F: House Bought for Exemption Under Section 54 Not Considered 'Additional' for Section 54F Exemption A participant in a discussion forum raised a query regarding the interpretation of Section 54F of the Income Tax Act. The individual, referred to as A, sold a residential house and a site, purchasing new residential properties to offset capital gains under Sections 54 and 54F. The question was whether the purchase of a house under Section 54 would be considered 'additional' under Section 54F, potentially affecting the exemption. The response clarified that since the house was purchased to claim an exemption under Section 54, it does not count as an 'additional' house for Section 54F purposes.