Search Results For: 54


QUERY: ‘A’ has two residential house (let out) in Mumbai and one residential house (self occupation) in Chennai. Now ‘A’ wants to purchase one residential house in Chennai, out of sale proceeds of one houses in Mumbai out of two residential houses. Whether ‘A’ will get section 54 exemption or not?
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It is not clear from the fact, whether the ‘A’ wants to dispose of the Chennai’s residential house and one house of Bombay and then buy one house in Chennai? If yes, ‘A’ is entitled to get the benefit of section 54.

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 NRI Tax Payer in 2003, booked a Flat in Kolkata, basically for investment purposes.

A Three Room Flat with specific Flat No. 32G, was allotted to him in May 2004. He went on paying the Price as per the Agreement, aggregating to Rs. 34,62,659/-, according to the progress of the Building Construction.

In 2006, he decided to return to Kolkata permanently and has been looking for a Residential Flat for his residence. He got a bigger 4 Bed Room Flat No. 31J in the same building. He made an initial payments of Rs. 8,35,200/- to the allottee of the said Flat No. 31J, as commitment money, with a clear understanding that, on his return to Kolkata, he will sell the Flat No. 32G allotted to him and pay the balance amount of Rs. 67,00,000/-.

He returned to Kolkata permanently on 31-1.2008 and sold the flat allotted to him on 3-6-2009 for net Sale Price of Rs. 67,00,000/- and paid for the bigger Flat No. 31J, the balance of the agreed amount.

He took the Physical Possession of the bigger Flat No. 31J on 13-11-2008.

Now, the question is, whether the Capital Gain on Sale of the Flat No. 32G, allotted to him in the Year 2004, after FIVE Years of the date of allotment would be considered as a Long Term Capital Gains and the said Capital Gains on an Investment for Residential Flat within one year from the date of sale will be an exempted income in terms of the Provisions contained in section 54 and/or section 54F of the Income-tax Act, 1961.
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A right in Flat No. 32G was acquired in May, 2004, which was under construction. For which he made payments in instalments. The said right was sold by him on 3-6-2009 without taking the possession of the said flat.

QUERY: A NRI settled in USA. He is having Green Card. He purchased four residential properties when he was resident in India with Indian Rupees. All his properties are more than three years old. Now he has just sold all its properties. To save taxes he wants to purchase another one property in USA. Could he do it under section 54, as it no where written that properties must be purchased in India?

Can he send the money to USA without deducting any withholding taxes, to purchase the property in USA.
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According to me, the benefit under section 54 of the Act cannot be denied on acquisition of property in USA. This view is supported by the Mumbai Tribunal in the case of Mrs. Prema P. Shah vs. ITO [100 ITD 60], wherein the Tribunal has held as under:

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: In case of redevelopment of property the consideration takes in the form of corpus, which is a real cash inflow and fair market value of the property to be developed, which is a deemed consideration for the purpose of exchange. Thus, there is exchange of property. Now, the question is in which year capital gain arises and when can exemption be claimed either under Section 54 or under section 54F?
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n case of development of property the capital gain arises as per terms of the agreement. Generally, the agreement provides that the developer has right to enter and construct on the land of owner and owner parts with land only on receipt of certain portion of building to be constructed. Till then possession of land is not parted with. In such case, the amount received is to be treated as advance.

QUERY: In case of redevelopment of property the consideration takes in the form of corpus, which is a real cash inflow and fair market value of the property to be developed, which is a deemed consideration for the purpose of exchange. Thus, there is exchange of property. Now, the question is in which year capital gain arises and when can exemption be claimed either under Section 54 or under section 54F?
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In case of development of property the capital gain arises as per terms of the agreement. Generally, the agreement provides that the developer has right to enter and construct on the land of owner and owner parts with land only on receipt of certain portion of building to be constructed

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: 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.