New Delhi, July 19 -- The Pune Bench of the Income Tax Appellate Tribunal (ITAT) has clarified that taxpayers may still be eligible for capital gains tax exemption under Section 54 even if the Income Tax Department computes capital gains using the higher stamp duty value under Section 50C.

In a recent order, the tribunal held that Sections 50C and 54 operate independently. While Section 50C permits the tax department to substitute the stamp duty value for the actual sale price while calculating capital gains, it does not automatically take away the exemption available under Section 54 if the taxpayer reinvests the gains in another residential house and fulfils the prescribed conditions.

The case involved Himanshu Jain, who sold a reside...