Exemption - Long term capital gain

[Guest]

assessee sold house property for rs 25lacs and earned long term capital gain of rs 14 lacs and invested rs 16 lacs in new house property in the name of his wife .in his books of accounts he showed this investmentas purchaseof new house. Whether this investment qualifyfor exemption of long term capital gain.

[Surender Gupta]

Yes, there is no conditin in the provisions of section 54 that new house should be registered in the name of assessee. It is sufficient that assessee has purchased new house. You shall be entitled to claim exemption even if this house is registered in the name of his wife.

[CAGOPALJI AGRAWAL]

Yes, agreed with the view of Surender Ji. Benami Transaction Act exempt this relation.

[Surender Gupta]

In additions to the submission earlier, it is submitted that, under section 54F, investment in the name of legal heir was denied by the Bombay High Court in the matter of PRAKASH (by legal heir of assessee) Versus ITO & CIT AND OTHERS [2009 -TMI - 33351 - BOMBAY HIGH COURT] on the other hand, in respect of exemption under section 54, the exemption was granted by the ANDHRA PRADESH High Court in the matter of, Late Mir Gulam Ali Khan (by Legal Representative Mrs. Noor Begum Versus Commissioner Of Income-Tax [2008 -TMI - 25937 - ANDHRA PRADESH High Court]

AI Summary

Investing Long-Term Gains in Spouse's Name Qualifies for Tax Exemption Under Section 54, Amidst Mixed Court Rulings. An individual sought advice on whether investing long-term capital gains from selling a house into a new property registered in his wife's name qualifies for a tax exemption under section 54. A respondent affirmed that the exemption applies as there is no requirement for the new house to be in the assessee's name. Another contributor agreed, noting the Benami Transaction Act allows such transactions between spouses. A further reply highlighted differing court rulings, with the Bombay High Court denying exemptions for legal heirs under section 54F, while the Andhra Pradesh High Court granted them under section 54.