Mumbai ITAT has held that two flats used as one family home can be treated as a single residential house for Section 54F tax benefits.
ET Realty reported on September 9, 2026, that the Mumbai Income-Tax Appellate Tribunal has held that two flats can be categorised as a single residential house when they are bought and used as one home. The decision may allow taxpayers to claim deductions under Section 54F of the Income-Tax Act.
What happened
The tribunal placed emphasis on the functional use of the properties. It recognised that multiple flats used as one residence for a family can be treated as a single residential house.
This interpretation applies to the tax benefit available under Section 54F of the Income-Tax Act.
Why it matters
Taxpayers who invest in two flats for use as one family home may be able to seek the benefit of Section 54F. The decision connects the tax treatment to how the properties are used, not only to the fact that there are two separate flats.
Expert view
The practical point from the tribunal’s decision is that the functional use of the flats matters. A taxpayer considering multiple flats for family use should examine whether they are being used as one home while assessing eligibility for the Section 54F deduction.
What buyers should check
Buyers and taxpayers should check the intended use of both flats, whether they function as one residential house, and whether the proposed investment meets the conditions for a Section 54F deduction. The tax position should be assessed before relying on the benefit.