Income Tax--Capital Gain on Sale of Property
Fractional Ownership, Whether can be Considered or Not at the Time of Claiming Exemption Under Section 54F
CA. Sanjeev Goyal
The primary objective of sections 54 and section 54F of the Income Tax Act was to mitigate the acute shortage of housing, and to give impetus to house building activity. There could be a possibility where a person owns around 100 properties and let's say that person holds 80% share of all the properties. If we do not consider fractional ownership of a property then in such a case, the person can claim the benefit of deduction under section 54F and accordingly, the object and purpose of inserting section 54F would get defeated The Learned Author discusses the issue in this Article.
1. Object and purpose of inserting section 54F
The primary objective of the section 54 and section 54F of the Act was to mitigate the acute shortage of housing, and to give impetus to house building activity. There could be a possibility where a person owns around 100 properties and let's say that person holds 80% share of all the properties. If we do not consider fractional ownership of a property for the purpose of section 54F. In such a case, the person can claim the benefit of deduction under section 54F. And accordingly, the object and purpose of inserting section 54F is defeated.
2. CBDT Circular No. 1/2024 [F.No. 370142/38/2023]