Section 54 benefits available on a home built on adjoining lots: Experts


Recently, the Income Tax Appeal Tribunal (ITAT) in Delhi ruled in favor of a person whose father had sold his old house and used the proceeds to buy three adjoining plots on which he built a big house in Gurgaon that can accommodate a lifetime. family. Under Section 54 of the Income Tax (IR) Act, tax exemption is permitted for the purchase of “residential property”. The point of contention in this case was whether a house built on three plots (which, in effect, has three residential units but within a single compound wall) is eligible for the Section 54 deduction. The tax authority was of the opinion that the exemption should only be authorized for one of the three. The ITAT, however, allowed the whole house exemption.


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First published: Tuesday, September 13, 2022. 9:14 p.m. IST