• Will I get income tax exemption if I construct new house with Asbestos sheets roofing

I sold 40 years old empty plot and I got 40 lakhs(market value).Right now I don't have any house.
I think if i construct new house with these 40 lakhs ,no need to pay income tax for these 40 lakhs...
My doubt is ...I want to spend 38.5 lakhs to purchase land(plot) and 1.5 lakhs to construct new small house.I want to construct new house with 2 small rooms with Asbestos sheets for roofing.I don't want to use cement slab..I don't have approved plan from muncipality.
if i construct new small house with Asbestos sheets roofing ,without cement slab, without approved plan from muncipality, will i get income tax exemption for these 40 lakhs?
can u pls clarify my doubts? pls give detailed ans...
Asked 3 months ago in Income Tax

It should be considered as a house.


Although it is litigative as municipality has not approved it or not considered as house but if you can prove that you live there and it is your house then you might get exemption.

You should have bills of construction.


Frankly to show a construction in 1.5 lakh is bit too risky.


Hope you find the information helpful, if yes do rate if 5 and provide your valuable feedback for my improvement.

Thank you.

Naman Maloo
CA, Jaipur
4065 Answers
70 Consultations

5.0 on 5.0

House is defined under income tax as place which is fit for residence purpose by an individual if the design you are making is justifiable you can claim Capital gain benefit

Vishrut Rajesh Shah
CA, Ahmedabad
826 Answers
34 Consultations

5.0 on 5.0

- You are entitled for exemption either u/s 54F or 54EC. Section 54F clearly says investment in residential house. House should be habitable. Your case neither fulfills the definition of purchase nor construction of the house. In your case the objective of the section gets defeated. Exemption would be denied.


For detailed discussion, you may opt for phone consultation.

Vivek Kumar Arora
CA, Delhi
4493 Answers
621 Consultations

5.0 on 5.0

If it is habitable it should be considered as a house and you may get exemption. Maintain proof of expenditure. 

Prerna Peshori
CA, Pune
94 Answers

5.0 on 5.0

Section 54F: If any Long Term Capital Asset( other than the residential house) is transferred and new residential house property is purchased - Within 1 year before or 2 years after transfer or construction - Within 3 years from transfer then the assessee can claim exemption of the capital gain. 

Further, House property as per the Income-tax Act, 1961 means any building (or land adjacent to such building) owned by the assessee himself. A residential house means a house which is not used for commercial purposes. 

If the house which you are constructing on the plot of land can be used for your residential purpose then you can claim the exemption u/s 54F. 

However, this claim might be subjected to litigation due to the proportion of the cost of land and the cost of construction costs. 




Puja Sharma
CA, Jaipur
63 Answers

Not rated



Yes, the roof can be made of the sheets. The construction should make the property habitable. The exemption would be available.

Lakshita Bhandari
CA, Mumbai
5660 Answers
817 Consultations

5.0 on 5.0

Dear Sir,


Hope you are doing well !!


Yes, you will get the exemption for new small house with asbestos sheets.

Payal Chhajed
CA, Mumbai
5175 Answers
244 Consultations

5.0 on 5.0

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