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Section 54F mentions circumtanes when exemption granted under section 54F may be withdrawn, which says that if assessee purchases, within a period of  two years of transfer of original assets, or constructs within a period of three years of transfer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

Section 54F restriction: purchasing an additional residential property within two years voids exemption under capital gains law. Capital gain exemption under 54F will be withdrawn if, after purchasing a new residential house to claim the exemption, the assessee purchases any other residential house within two years of the transfer; exemption is also withdrawn if another residential house is constructed within three years of the transfer.