1. Home
  2. Infrastructure Urban
  3. ECONOMY & POLICY
  4. ITAT: Sale Proceeds from Depreciated Assets Qualify for Tax Benefits
ITAT: Sale Proceeds from Depreciated Assets Qualify for Tax Benefits
ECONOMY & POLICY

ITAT: Sale Proceeds from Depreciated Assets Qualify for Tax Benefits

23 Aug 2024 2 Min Read CW Team
The Income Tax Appellate Tribunal (ITAT) has ruled that proceeds from the sale of depreciated assets qualify for tax benefits if they are invested in the purchase or construction of a new residential property. The decision provides much-needed clarity for taxpayers looking to reinvest proceeds from assets that have lost value over time.

The ruling stems from a case where a taxpayer claimed capital gains exemption under Section 54F of the Income Tax Act. This section allows for tax exemption on long-term capital gains if the proceeds are reinvested in a residential property. The taxpayer had sold a depreciated asset and used the proceeds to purchase a new home, seeking tax relief on the reinvested amount.

The tax authorities initially rejected the claim, stating that the asset was depreciated and, hence, did not qualify for tax benefits. However, the ITAT overruled this decision, stating that the nature of the asset?s depreciation does not negate the taxpayer's eligibility for benefits under Section 54F. The tribunal emphasised that the purpose of the law is to encourage reinvestment in residential properties, regardless of the asset's prior depreciation.

This ruling is significant as it sets a precedent for similar cases, providing relief to taxpayers who seek to reinvest their capital in real estate, even from depreciated assets. It also underscores the importance of the provisions under Section 54F, which aim to incentivize investment in residential properties.

Redefine the future of urban mobility! Join us at the Metro Rail Conference 2025 to explore groundbreaking ideas and insights. 👉 Register today!

The Income Tax Appellate Tribunal (ITAT) has ruled that proceeds from the sale of depreciated assets qualify for tax benefits if they are invested in the purchase or construction of a new residential property. The decision provides much-needed clarity for taxpayers looking to reinvest proceeds from assets that have lost value over time. The ruling stems from a case where a taxpayer claimed capital gains exemption under Section 54F of the Income Tax Act. This section allows for tax exemption on long-term capital gains if the proceeds are reinvested in a residential property. The taxpayer had sold a depreciated asset and used the proceeds to purchase a new home, seeking tax relief on the reinvested amount. The tax authorities initially rejected the claim, stating that the asset was depreciated and, hence, did not qualify for tax benefits. However, the ITAT overruled this decision, stating that the nature of the asset?s depreciation does not negate the taxpayer's eligibility for benefits under Section 54F. The tribunal emphasised that the purpose of the law is to encourage reinvestment in residential properties, regardless of the asset's prior depreciation. This ruling is significant as it sets a precedent for similar cases, providing relief to taxpayers who seek to reinvest their capital in real estate, even from depreciated assets. It also underscores the importance of the provisions under Section 54F, which aim to incentivize investment in residential properties.

Next Story
Infrastructure Urban
07 Jan 2025

Nagpur Body Collects Rs 836 Million in Property Tax as Scheme Ends

The Nagpur Municipal Corporation (NMC) concluded its property tax rebate scheme on December 31, 2024, amassing Rs 836 million from 1,63,813 property owners between July 1 and December 31. The scheme offered a 10% rebate for online payments and 5% for offline payments, incentivising many to clear their dues. However, a significant number of taxpayers missed the opportunity. Earlier in the financial year, NMC introduced higher rebates of up to 15% for online payments and 10% for offline payments for dues cleared before June 30, 2024. This earlier phase of the scheme resulted in Rs 768.5 mil..

Read More
Next Story
Infrastructure Energy
07 Jan 2025

Tata Power Invites EoI for 500 MW Renewable Energy Procurement

Tata Power Trading Company (TPTCL), a subsidiary of Tata Power, has released an Expression of Interest (EoI) to procure up to 500 MW of renewable energy, encompassing solar, wind, hybrid, hydroelectric projects, or green attributes for a contract period of up to 25 years. Interested bidders must submit their proposals by January 31, 2025. The procurement scope includes off-taking energy or green attributes generated from renewable projects, with flexibility for physical or virtual procurement. The delivery point will be the interconnection between the project and the central or state transmi..

Read More
Next Story
Infrastructure Urban
07 Jan 2025

Andhra Pradesh to Lift Ban on 22A Lands, Resurvey to Begin January 20

The Andhra Pradesh government has announced plans to lift the ban on 22A lands, a move aimed at benefiting economically disadvantaged groups. District collectors have been instructed to submit reports within three days, detailing the number and categories of 22A lands in their jurisdictions. Additionally, the state will restart a comprehensive land resurvey on January 20. Revenue Minister Anagani Satya Prasad criticised the previous government for allegedly misusing 22A provisions to harass landowners and facilitate land grabbing. He stated that 450,000 acres were unlawfully exempted from the..

Read More

Opinion Poll

Question : Which technological advancement do you believe will most transform the real estate industry in the coming years?

Latest updates

Nagpur Body Collects Rs 836 Million in Property Tax as Scheme Ends
ECONOMY & POLICY
07 Jan 2025

Nagpur Body Collects Rs 836 Million in Property Tax as Scheme Ends

Tata Power Invites EoI for 500 MW Renewable Energy Procurement
POWER & RENEWABLE ENERGY
07 Jan 2025

Tata Power Invites EoI for 500 MW Renewable Energy Procurement

Andhra Pradesh to Lift Ban on 22A Lands, Resurvey to Begin January 20
ECONOMY & POLICY
07 Jan 2025

Andhra Pradesh to Lift Ban on 22A Lands, Resurvey to Begin January 20

India Leads Global Green Hydrogen Push: Minister Pralhad Joshi
POWER & RENEWABLE ENERGY
07 Jan 2025

India Leads Global Green Hydrogen Push: Minister Pralhad Joshi

REC Loan Disbursements Rise 18% in Q3 FY25
ECONOMY & POLICY
07 Jan 2025

REC Loan Disbursements Rise 18% in Q3 FY25

Telangana Aims Rs 1.98 Trillion Investments with Green Energy Policy
POWER & RENEWABLE ENERGY
07 Jan 2025

Telangana Aims Rs 1.98 Trillion Investments with Green Energy Policy

Oil Prices Hit Highest Since October on Weather and China Stimulus
OIL & GAS
07 Jan 2025

Oil Prices Hit Highest Since October on Weather and China Stimulus

Nayara Energy to Add One Fuel Station Per Day in 2025
POWER & RENEWABLE ENERGY
07 Jan 2025

Nayara Energy to Add One Fuel Station Per Day in 2025

Hi There!

"Now get regular updates from CW Magazine on WhatsApp!

Join the CW WhatsApp channel for the latest news, industry events, expert insights, and project updates from the construction and infrastructure industry.

Click the link below to join"

+91 81086 03000