Claiming 54f rebate on capital gain
N Krishna
(Querist) 17 August 2017
This query is : Resolved
I deposited sale proceeds of residential land in capital gain account. I want to use the money to build a house on another land owned by me. But the issue is that the land has B khata. BBMP does not provide plan sanction for the same. If I go ahead and build the house without building plan, will it be an issue while obtaining approval from Income tax officer (ITO) while closing the capital gain account ?
if yes, please suggest what can be done to get the ITO approval to claim rebate on 54F
Rajendra K Goyal
(Expert) 17 August 2017
Seems, IT Officer may not allow benefit on unapproved construction.
However, discuss with local tax consultant.
N Krishna
(Querist) 18 August 2017
Thanks for your response. I saw a petition online regarding this wherein judgement was given in favour of the tax payer quoting that the 54F law does not mention about building plan or completion certificate to prove the possession. It only mentions that capital gain amount should be used to construct any house. If i can prove the house construction by showing material purchase receipts and also get house evaluation done by certified evaluator, do you think it would suffice to get ITO approval ?
Rajendra K Goyal
(Expert) 18 August 2017
The ruling was not in knowledge, as advised above, please discuss in detail with local tax consultant. Show him the ruling.
ABHIMANYU JHAMBA
(Expert) 18 August 2017
Yes. You just need to convince the tax authorities that the amount was spent on construction. Maintain adequate documentation. Also complete the construction activity within the period of limitation.
Abhimanyu jhamba
Advocate/CA
9218999999
