Sec 54 benefit on sale/ purchase of multiple houses
N K Jain
(Querist) 21 October 2017
This query is : Resolved
A owns a house in Mumbai. He also owns another house jointly with his wife in New Mumbai. He sold both the houses in July 2017. Sale proceeds are 1.25 crore on first house and Rs 1.5 crore on second house. He has computed LTCG on first house as 50 lakhs and on second house as 60 lakhs, his share being half at 30 lakhs and his wife share also as 30 lakhs. He buys a house in Delhi NCR in Aug 2017 for Rs 1 crore in joint name with his wife. He also buys another house in Sep 2017 for Rs 1.25 crore, also in joint name with his wife. Can he claim benefit of Rs 50 lakhs (LTCG on his first house at Mumbai) against purchase of first house in Delhi NCR and of Rs 30 lakhs (his share of LTCG in second house) against purchase of second house ? Is there any restriction that he must not own another house on date of purchase of a residential property to avail benefit of section 54?
Rajendra K Goyal
(Expert) 22 October 2017
Budget 2014 has introduced an amendment to Section 54 and from Financial Year 2014-15 i.e. Assessment Year 2015-16, exemption under Section 54 is available if the amount is re-invested in 1 Residential House situated in India.
However it is advised to discuss in detail with local tax consultant.
