Capital Gains Tax Exemptions under section 54f

Under Section 54F of the Income Tax Act, individuals can claim exemption from long-term capital gains tax arising from the sale of a capital asset (other than a residential house) if the net sale proceeds are invested in purchasing or constructing a new residential house within specified timeframes. One of the key conditions is that, on the date of transfer of the original asset, the taxpayer should not own more than one residential house property, excluding the new asset intended for the exemption.

Your Situation:

• 
  Original Asset Sold: Plot in Goa, sold in July 2024.
• 
  New Residential House: Apartment booked in April 2024, with possession expected in March 2027.
• 
  Existing Properties at the Time of Sale:

  • Sole ownership of one residential property.
  • Joint ownership (with your husband) of another residential property.

Key Consideration:

The primary question is whether joint ownership of a residential property is considered as "ownership" under Section 54F, which would affect your eligibility for the exemption.

Relevant Judicial Precedents:

Several judicial rulings have addressed this issue:

1. Dr. P.K. Vasanthi Rangarajan vs. CIT [2012] 209 Taxman 628 (Madras High Court):

   • The court held that joint ownership of a residential house does not disqualify an individual from claiming exemption under Section 54F. The assessee was not considered the exclusive owner of the jointly held property, and thus, the exemption was allowed.
     India Tax Blog

2. Ashok G. Chauhan vs. ACIT [2019] 105 taxmann.com 204 (Mumbai ITAT):

   • The Tribunal observed that the condition of not owning more than one residential house on the date of transfer refers to absolute ownership. Joint ownership does not equate to absolute ownership; therefore, the exemption under Section 54F was granted.
     India Tax Blog

3. CIT vs. M.J. Siwani [2014] 366 ITR 356 (Karnataka High Court):

   • In contrast, this ruling held that even a fractional ownership in a residential property constitutes ownership, thereby affecting eligibility under Section 54F.
     India Tax Blog

Conclusion:

Given the conflicting judicial interpretations, the applicability of Section 54F in cases of joint ownership depends on the jurisdiction and specific circumstances. In your case, since you are the sole owner of one residential property and a joint owner of another, there is a reasonable basis to claim that you do not "own" more than one residential house in the context of Section 54F, based on favourable rulings like those from the Madras High Court and Mumbai ITAT.