A partnership firm, owns a house property which is utilized by the partners for their residence. On 31.10.2020, the firm sells the property at a long-term capital gain of ₹ 6,00,000. Can the firm or partners claim exemption under section 54?
A. Yes, the firm can claim exemption u/s 54 as the firm has earned long term capital gains from the transfer of a residential house.
B. Yes, the partners can claim ex-emption u/s 54 as the property was used by them for residential purpose and the said property has been indirectly transferred by the partners only in the capacity of a firm.
C. Neither the firm nor the partners can claim deduction u/s 54 as the said deduction is allowed only in case of a commercial property
D. The firm cannot claim deduction u/s 54 as deduction under the said section is allowed only to an individual or HUF. Further, the partners cannot claim deduction u/s 54 as the transferor in the instant case is the firm.
Answer:D
A partnership firm, owns a house property which is utilized by the partners for their residence. On 31.10.2020, the firm sells the property at a long-term capital gain of ₹ 6,00,000. Can the firm or partners claim exemption under section 54?
A. Yes, the firm can claim exemption u/s 54 as the firm has earned long term capital gains from the transfer of a residential house. B. Yes, the partners can claim ex-emption u/s 54 as the property was used by them for residential purpose and the said property has been indirectly transferred by the partners only in the capacity of a firm. C. Neither the firm nor the partners can claim deduction u/s 54 as the said deduction is allowed only in case of a commercial property D. The firm cannot claim deduction u/s 54 as deduction under the said section is allowed only to an individual or HUF. Further, the partners cannot claim deduction u/s 54 as the transferor in the instant case is the firm.