54. Profit on sale
of property used for residence.- (1) Subject to the
provisions of sub-section (2), where, in the case of an assessee
being an individual or a Hindu undivided family, the capital
gain arises from the transfer of a long-term capital asset
, being buildings or lands appurtenant thereto, and being
a residential house, the income of which is chargeable under
the head “Income from house property” (hereafter
in this section referred to as the original asset), and the
assessee has within a period of one year before or two years
after the date on which the transfer took place purchased
, or has within a period of three years after that date constructed,
a residential house, then, instead of the capital gain being
charged to income-tax as income of the previous year in which
the transfer took place, it shall be dealt with in accordance
with the following provisions of this section, that is to
say,—
(i) if the amount of the capital gain is greater than the
cost of the residential house so purchased or constructed
(hereafter in this section referred to as the new asset),
the difference between the amount of the capital gain and
the cost of the new asset shall be charged under section 45
as the income of the previous year; and for the purpose of
computing in respect of the new asset any capital gain arising
from its transfer within a period of three years of its purchase
or construction, as the case may be, the cost shall be nil;
or
(ii) if the amount of the capital gain is equal to or less
than the cost of the new asset, the capital gain shall not
be charged under section 45; and for the purpose of computing
in respect of the new asset any capital gain arising from
its transfer within a period of three years of its purchase
or construction, as the case may be, the cost shall be reduced
by the amount of the capital gain.
(2) The amount of the capital gain which is not appropriated
by the assessee towards the purchase of the new asset made
within one year before the date on which the transfer of the
original asset took place, or which is not utilised by him
for the purchase or construction of the new asset before the
date of furnishing the return of income under section 139,
shall be deposited by him before furnishing such return such
deposit being made in any case not later than the due date
applicable in the case of the assessee for furnishing the
return of income under sub-section (1) of section 139 in an
account in any such bank or institution as may be specified
in, and utilised in accordance with, any scheme 11 which the
Central Government may, by notification in the Official Gazette,
frame in this behalf and such return shall be accompanied
by proof of such deposit; and, for the purposes of sub-section
(1), the amount, if any, already utilised by the assessee
for the purchase or construction of the new asset together
with the amount so deposited shall be deemed to be the cost
of the new asset :
Provided that if the amount deposited under this sub-section
is not utilised wholly or partly for the purchase or construction
of the new asset within the period specified in sub-section
(1), then,—
(i) the amount not so utilised shall be charged under section
45 as the income of the previous year in which the period
of three years from the date of the transfer of the original
asset expires; and
(ii) the assessee shall be entitled to withdraw such amount
in accordance with the scheme aforesaid.
Explanation.— [Omitted by the Finance Act, 1992, w.e.f.
1-4-1993.]
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