Capital Gains on Sale of Residential House Property – Utilised For Acquiring New Residential House Property – Eligible For Exemption U/S.54
In letter No. 207/24/76-(A-II), Dated 25-3-1977 the CBDT has clarified that section 54 lays emphasis on the use of the property mainly for the purpose of assessee or his parents own residence. If an assessee has retained more than one house for the purpose of his own or the parents own residence, and has used them for such residence, and not for any other purpose, the capital gains arising on transfer of each of such house would quality for exemption under section 54, provided the other conditions spelt out therein are fulfilled.
Residential house therefore for capital gains arising from sale of more than one residential house will be eligible for exemption under section 54 if the gains from both the houses are invested in one and the same residential house.
Source: The Tax reference, Volume 123, Issue No. 2, 9th Jan 2012.
