Applicability of Exemption u/s 54

[DINESH MITTAL]

'A' sold house in India and purchase a new house within stipulated period in Canada, whether he is legible for exemption u/s 54. of the Income Tax Act, 1961

[Dinesh Gupta]

There is no restriction in section 54 of the Income Tax Act, which restrict the investment of capital gain within stipulated period in a house property situated out of India. Therefore you can buy a house in Canada and claim the exemption.

[SUNILKUMAR GUPTA]

Dear friend you can refer to 282 ITR (AT)211 , Mumbai - wHERE IT HAS BEEN HELD SEC.54 DOES NOT PROHIBIT PURCHASE OF PROP. IN A FOREIGN COUNTRY.

AI Summary

Capital gains exemption under section 54: purchasing replacement residential property abroad does not bar claiming the exemption. Under the statutory scheme, Section 54 requires reinvestment in a qualifying residential property within the prescribed period but does not condition the exemption on the replacement property's geographic location; purchasing a residential house abroad can satisfy the reinvestment requirement provided all other statutory time limits and eligibility conditions are met.