New Delhi, Oct. 1 -- A taxpayer who sold an inherited house and constructed a new one on a plot registered in his wife's name has received partial relief on his capital gains tax claim.

The Chennai Income Tax Appellate Tribunal (ITAT) held that the taxpayer could not be denied the entire Section 54 exemption merely because the underlying plot had been bought earlier in his wife's name. However, the cost of the plot itself was not eligible because it fell outside the prescribed purchase window.

The ruling is relevant for taxpayers who sell a residential property and use the proceeds to construct another house, particularly where the new property involves a spouse's name or a plot bought before the sale of the old property.

The case invo...