Recent order in I-T Act not clear with many
The Madras high court, in a recent order, has held that the restrictive provisions introduced in the Income Tax (I-T) Act, which call for reinvestment in only `one’ residential house in India for claiming capital gains tax exemption, apply from fiscal April 1, 2014.
The explanatory memorandum to the Finance Bill, 2014, had clarified that the benefit of capital gains tax exemption under section 54 and 54F was intended only in respect of reinvestment in one residential house in India.
Thus, on enactment of the Bill, the relevant sections of the I-T Act were amended. Earlier, the words used in the I-T Act were reinvestment in `a residential house’. This is now substituted with `one residential house in India’. Prior to the amendment, there was ambiguity on whether the term `a residential house’ meant a single unit or could include more than one new house.
The new order that has been passed in the Madras high court regarding the Income Tax Act has still not been clear to many people. The officials are seeking help so as to understand the process.
Source: The Times of India
Finance Bill 2014, Income Tax (I-T) Act, Income Tax Act, Madras High Court, residential house in India, Tax exemption
