Captial Gain - 54F Exemption

[PANKAJ GROVER]

Dear Sir

This is regarding exemption under section 54F. Assessee is not having any residential house on the date of transfer. Assessee purchased one residential house for claiming exemption under section 54F. Can the assessee purchase another house within the period of  2 years without loosing the benefit of earlier exemption, as the assessee can hold two residential houses under section 54F?

Regards

Neeraj Taneja

RAPG & Co.

[Guest]

Dear Mr. Neeraj,

Section 54F mentions circumtanes when exemption granted under section 54F may be withdrawn, which says that if assessee purchases, within a period of  two years of transfer of original assets, or constructs within a period of three years of transfer of such assets, a residential hous other than the new house. (whose income is taxable under the head "Income from house propert")  

 Thus, to conclude the assess can not purchase another house within the period of two years.

 

Regards,

CA. Alpesh Shah,

Vadodara

 

AI Summary

Clarification on Section 54F: Buying an additional house within two years may revoke capital gain tax exemption. An individual inquired about the conditions under Section 54F of the Income Tax Act for claiming capital gain exemptions when purchasing a residential house. The query focused on whether the assessee could buy an additional house within two years without losing the initial exemption. The response clarified that under Section 54F, if the assessee purchases or constructs another residential house within two or three years of the original asset transfer, the exemption may be withdrawn. Therefore, the assessee cannot purchase another house within the specified period without affecting the exemption.