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June 29 To July 5, 2019 u Taxmann’s Corporate Professionals Today u Vol. 45 u 10The Govt. may consider to make it mandatory
for any individual person to file the Income-
tax return if his income, before claiming any
exemption under Sections 54 to 54GB, exceeds
maximum exemption limit.- Benefit of sections 54, 54F & 54EC
to be allowed even if new investments are
made in name of close relatives
The exemptions under Sections 54, 54F, 54EC
and 54B are allowed only when an assessee
makes investment in some specified assets.
The assessee and Income-tax department are
often at loggerheads in respect of relative
for whom the new asset should have been
acquired by assessee to claim the exemption.
The Assessing Officer often disallows the
exemption if assessee purchases new asset in
name of his close relative (i.e., son, daughter
or spouse) and claims the exemption by
contending that there is no requirement that
the investment in new assets should be in
the name of the assessee.
There is no clarity in the law whether
exemption shall be available in case the new
asset has been acquired by assessee in name
of his close relatives. Thus it is suggested
that Union Budget, 2019 should bring about
suitable amendments to end the litigations. - Allow more time to buy new house
for Sec. 54 or 54F exemptions
Sections 54 and 54F allows very little time
to the taxpayers to invest in a new house.
It allows 1 year before or 2 years after the
date of transfer of old property in case of
purchase of new property and 3 years if new
property has to be constructed.
Generally, in township projects, the developers
take minimum of 5 years before handing over
the possession of the property to the buyers.
In that case, if a buyer gets the possession
of new house after 3 year, he is not allowed
to claim Section 54/54F exemption. Therefore,
suitable amendment is needed to allow section
54/54F exemptions to genuine taxpayers who
invest in a project developed by a builder
registered under RERA. Either the time limit
to invest in new house should be increased
to at least 5 years or a clarification should
be issued that the taxpayer shall be allowed
deduction for all investments made within
the given time limit even if purchase or
construction is not yet completed in that
stipulated time limit.
The time limit for construction or purchase
of a house property for deduction of interest
on housing loan has also been increased from
three years to five years by the Finance Act,- Therefore, it has become necessary
to increase the time limit under Section 54
and 54F. - Deposit in Capital Gain Scheme should
not exceed the due date for filing of return
The provisions of section 54(2) stipulate that
the amount of the capital gain which is not
utilised by the assessee towards the purchase
or construction of the new house before the
date of furnishing the return of income under
section 139, shall be deposited by him in
capital gain account scheme. Section 54F(4)
also provides exemption on similar lines.
Various Judicial authorities have held that
for the purpose of Section 54/54F the due
date for furnishing of return of income, as
provided under Section 139(1), is subject to
extended period as provided under Section
139(4). However, as the issue is not free
from doubt and is likely to occur every now
and then, it is recommended that a specific
date (or a clarification in this regard) may
be mentioned in sections 54 and 54F so that
this type of uncertainty does not prevail.
Section 139(4) does not deem an extension
of due date specified under Section 139(1) in
case of carry forward of unclaimed losses.
Allowing additional time would be a nagging
EXPECTATIONS FROM AND RECOMMENDATIONS FOR UNION BUDGET 2019