Taxes arising from capital gains often become a reason for conflict between taxpayers and income tax authorities. When it comes to the sale of any property other than a residential house, section 54F comes as a relief for taxpayers by offering exemption on resulting capital gains.
However, if a taxpayer wants to claim this exemption, he must understand the necessary conditions prescribed under the law:
Sometimes, the lack of clarity or misunderstanding of these conditions does lead to disputes between the taxpayers and the tax department. Recently one similar dispute came for adjudication before Delhi bench of Income Tax Appellate Tribunal (ITAT). The major dispute, in this case, was regarding, whether the taxpayer can claim the section 54F exemption for an under construction for more than one year for the same house.