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Can My Father Claim Tax Deduction on the New Property?

T S Khurana

T S Khurana   |536 Answers  |Ask -

Tax Expert - Answered on Aug 31, 2024

A certified management accountant since 1993, T S Khurana is a fellow member of The Institute of Cost Accountants of India. His areas of expertise are income tax, specifically litigation cases, and GST.

Since the last 21 years, he has also been providing expert advice on financial matters, including investments and diversification of funds, and wealth building in the long term to his clients.
He believes that investment in real estate is the safest way for better returns and wealth generation over a period of time.

A former chairman of the Chandigarh Chapter of Institute of Cost Accountants of India, T S Khurana has also served as member of its technical committee.... more
Asked by Anonymous - Aug 11, 2024Hindi
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My father is planning to sell one residential property and the proceeds of the sale plus loan that will be drawn by me (i.e. his son) would be consideration for purchasing of new property that would be under my name (I.e. his son). Will my father be able to claim deduction under sec 54 or should the new residential property be under his name only or can the new residential property can be under joint name? As per one of case laws this was allowed as deduction refer below summary: regards the name under whom the property is purchased, it can be seen that the son of the assessee is a direct relation and as per the Hon’ble Delhi High Court decision in case of CIT(A) Vs. Kamal Vahal 351 ITR 4 where the assessee purchased a new house in name of his wife, the claim under Section 54 is held valid. Thus, the exemption could not be denied if the entire investment had come out of the proceeds of an old property. Thus, the order of the CIT(A) is not justified in light of the decision in case of Kamal Vahal,” the Tribunal said Can you please confirm if my father can claim this exemption

Ans: 01. It is better to purchase the new house property in joint name of you & your father.
02. Exemption would be available u/s 54, even when the property is purchased in the name of Wife. Daughter or Son. Decisions of Tribunal/Court also support this version.
Most welcome for any further clarification. Thanks.
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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