Section 54 benefits available on house built on contiguous plots: Experts

If adjacent apartments are purchased from a developer, make the modifications to convert them into one unit

Recently, the Income-Tax Appellate Tribunal (ITAT), Delhi, ruled in favour of a person whose father had sold his old house and used the proceeds to purchase three adjacent plots on which he built a large house in Gurgaon that could accommodate his entire family. Under Section 54 of the Income-Tax (I-T) Act, tax exemption is permissible on the purchase of ‘a residential property’. The point of contention in this case was whether a house built on three plots (which, in fact, has three residential units but within a single compound wall) is eligible for Section 54 deduction. The tax authorities