Amendment of section 54
22. In section 54 of the Income-tax Act, in sub-section (1), for the words “constructed, a residential house”, the words “constructed, one residential house in India” shall be substituted with effect from the 1st day of April, 2015.
Notes on Clauses:
Clause 22 of the Bill seeks to amend section 54 of the Income- tax Act relating to profit on sale of property used for residence.
The existing provisions contained in sub-section (1) of section 54 provide that where capital gain arises from the transfer of a long-term capital asset, being a residential house, and the assessee within a period of one year before or two years after the date of transfer purchases, or within a period of three years after the date of transfer constructs, a residential house then the amount of capital gains to the extent invested in the new residential house is exempted.
It is proposed to amend the aforesaid sub-section so as to provide that the exemption is available, if the investment is made in purchase or construction of one residential house situated in India.
This amendment will take effect from 1st April, 2015 and will, accordingly, apply in relation to assessment year 2015-16 and subsequent years.
