Section - 54

[jasjit narang]

Section 54 query; Assessee has sold flat and has capital gain Rs. 40Laks, he is buying a property for Rs. 25 lakhs and buy amenities such as italian marble and modular kitchen of Rs. 15 lakhs. will it be allowed as exemption

[Guest]

Yes, purchase of a house and improvement thereof at the time of purchase would qualify the conditions of exemption under section 54.

AI Summary

Section 54 exemption: expenditure on house purchase and contemporaneous improvements qualifies for capital gains relief. Expenditure incurred to improve or furnish a newly acquired residential property at the time of its purchase is treated as part of the cost of acquisition for purposes of the exemption under Section 54, and such contemporaneous improvement outlays qualify as qualifying expenditure to secure the capital gains exemption, subject to the statutory conditions attaching to the exemption.