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Section 54F - Deduction

A person sold a land (Long Term Capital Asset) during F.Y. 2014-15 and purchased another land (Plot A)  to build a residential house, complete sales conisderation was invested in it and claimed deduction u/s 54F. Next year i.e. during F.Y 2015-16 he sold another land (Long Term Capital Asset) and invested the total sales consideration for consturction of new residential house on Plot A, he claimed deduction u/s 54F next year too. Whether deduction u/s 54F is allowable for two consecutive AYs (All other conditions laid down u/s 54F are satisfied) ?

Sales consideation of two or more than two Long Term Capital Assets sold in a FY can be invested in a single new residential house and deduction u/s 54 or 54F(as the case may be), may be claimed. Similarly sales  consideration of such Long Term Capital Assets sold during different AYs may also be invested in a single residential house and deduction u/s 54/54F may be claimed on the similar lines. Hence the deduction is allowable in the above case.

6
Bandana Diwedi on July 29 2018 11:02:09

Whether investment in a plot will amount to investment in construction for the purpose of section 54F when no construction has been made

3614
Santosh Kumar on July 29 2018 16:42:33

A person sold a land (Long Term Capital Asset) during F.Y. 2014-15 and purchased another land (Plot A) to build a residential house, complete sales consideration was invested in it and claimed deduction u/s 54F.
FY2014-15 (AY2015-16)
Benefit of section 54F is available if the assessee purchases or constructs a residential house within prescribed period. In the instant case the assessee purchased another land and complete sale consideration was invested in it. As such the intention of the assessee was not to construct residential house but only to purchase plot hence deduction u/s 54F cannot be claimed. If the intention of the assessee was to construct residential house then he would have invested part amount for purchase of land and part amount for construction. Any other view on this?
FY2015-16
The assessee can claim deduction u/s54F as he has constructed residential house.

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