Search Results For: exemption


QUERY: ‘P’ had to sold her property in order to finance her daughter’s medical expenses.

The agreement for sale was entered for Rs. 50/- lakh. She received only Rs. 35/- lakh due to dispute with the buyer. No possession of the property was given. She does not have money to invest in order to claim exemption u/s. 54. The AO passed the order levying tax on Rs. 50/- lakh. Whether AO is right?
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In this case transfer is not complete, because of property has not been given and therefore there is no question of investing in another house to claim exemption under section 54.

QUERY: ‘A’ constructed residential house within 3 years of sale of long-term asset. First year investment made was of Rs. 70 lakhs and filed return u/s. 139(1). Balance Rs. 70 lakhs invested in next two years. No investment in Capital Gain Account Scheme. Whether exemption u/s. 54 available?
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From the facts, it is clear that ‘A’ is constructing a residential house for which he must have taken estimate from the architect /developer for construction of residential house. Now, if he keeps balance of Rs. 70 lakhs in separate bank account or

QUERY: The assessee sold residential house and planned to construct a new house for claiming exemption u/s. 54. The assessee expired in April, 2014. Can legal heir who has to file Return of Income can claim benefit u/s. 54 of the Act, and how?
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This point has been decided by the Madras High Court in C.V. Ramanathan v. CIT [125 ITR 191], wherein the Court held that one of the concessions provided for persons deriving capital gains under the Income-tax Act is that where a person sells property used for his residence and substitutes another its place, then any capital gain derived by him would not be liable to assessment so long as the entire capital gain is reinvested in the newly acquired property.

QUERY: Which of the following is the date of transfer of tenancy rights –

(a) date of agreement entered into by the assessee with landlord whereby he agrees to surrender tenancy in lieu of new flat to be allotted to him on ownership (for which tenant will pay construction cost to landlord @ Rs. 1,500 per sq. ft);

(b) date on which the tenant moves into an alternative accommodation so as to enable the landlord to demolish the building and construct new building;

(c) date on which the new building is constructed and occupancy certificate obtained;

(d) date on which the tenant pays the construction cost to the landlord. The agreement provides that if the tenant does not pay construction cost to the landlord within 30 days of being called upon to pay so, he shall continue to be the tenant in the new premises and shall pay rent at a certain agreed rate which is nominally more than the rent which was being paid by the tenant. Also, what is full consideration due to the assessee on transfer of tenancy. The tenant is not eligible to claim exemption u/s. 54F since he already owns 2 houses.
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As tenancy rights are surrendered only when tenant pays for construction cost to landlord. For the reason that the agreement provides that if the tenant does not pay construction cost to the landlord within 30 days of

QUERY: The assessee sold residential house and planned to construct a new house for claiming exemption u/s. 54. The assessee expired in April, 2014. Can legal heir who has to file Return of Income can claim benefit u/s. 54 of the Act, and how?
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Thus, it is clear from the above judgments that legal heir steps in the shoes of deceased and entitled for deduction under section 54 of the Act.

QUERY: A flat was sold. The AO adopted stamp duty value. The assessee invested full stamp duty value in another flat. Whether the assessee is entitled for deduction under section 54F?
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where capital gain is assessed on notional basis under section 50C, whatever amount is invested in new residential house within prescribed period under section 54F would get benefit of deduction irrespective of the fact that funds from other sources are utilised for new residential house

QUERY: I sold my residential property and made a long-term capital gain of Rs. 50 lakhs. I used the sale proceeds to purchase a commercial gala. Subsequently, within two years of sale of the residential property, I purchased another residential property by borrowing funds from the bank and relatives. Can I claim that the long-term capital gain is exempt u/s 54 even though the sale proceeds of the old house were not used for purchase of the new house?
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No! The only requirement for availing deduction u/s 54 is that the new residential house must be purchased or constructed within the period specified in the section. The source of funds is irrelevant.