Topic
Bank deposits, including current-account balances, are deemed ‘another capital asset’ under Section 11(1A) of the Income-Tax Act. This allows charitable trusts to claim full exemption on capital-gain income reinvested in such deposits, expanding the range of tax-free investment options for trusts.
The ITAT Bangalore has ruled that capital gains from the sale of multiple residential properties qualify for Section 54 exemption on a per-property basis, allowing taxpayers to reinvest gains from each sold flat into separate residential purchases without being capped at one house. This clarifies a long-standing ambiguity and benefits high-net-worth individuals and real estate investors who liquidate multiple units in a single financial year.
ITAT Pune rules that substantial payment and possession transfer under an agreement to sell qualifies for Section 54F exemption, even if the sale deed is registered years later. This clarifies that formal registration delay does not invalidate the exemption claim, offering relief to taxpayers in similar transactions.
The ITAT Agra has ruled that the purchase price of a residential plot acquired within one year before selling a commercial asset can be included in the cost of acquisition for claiming capital gains exemption under Section 54F, provided documentary proof is submitted. This clarifies a critical ambiguity for investors restructuring assets and expands the scope of eligible investments beyond construction costs alone.
The ITAT Bangalore has ruled that taxpayers claiming exemption under Section 54 of the Income Tax Act qualify for relief if they reinvest capital gains by the extended due date under Section 139(4), not just the original due date under Section 139(1). This overturns rigid departmental interpretations and provides critical relief to individuals who delay filing due to genuine administrative or procedural delays, aligning the law with practical realities of compliance.
ITAT Delhi rules that depositing sale proceeds in Capital Gains Account Scheme (CGAS) and initiating partial construction are sufficient to claim Section 54F exemption, even for jointly owned property and despite court-imposed delays. The ruling clarifies that co-owners need not complete construction within the prescribed timeline to retain tax benefits, reinforcing a pragmatic approach to capital gains exemptions.
ITAT Ahmedabad rules that investment in an under-construction residential property within the prescribed time limits under Section 54F qualifies for capital gains exemption, even if the payment was made prior to the sale of the original asset. This holding clarifies that the timing of possession or execution of the sale deed is not the sole determinant, provided the investment meets the statutory timeline.