Exemptions u/s 54 on sale of property

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This discussion clarifies Section 54 exemptions for capital gains tax on property sales. It explains that while investing sale proceeds in a new residential property generally qualifies for exemption, Section 54 is not applicable to short-term capital gains. Therefore, if the profit arises from a short-term sale, this specific exemption cannot be claimed.

PARDEEP KAPIL

PARDEEP KAPIL (Querist)
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28 January 2025 Dear Sirs : One of my clients purchased a plot of land three months ago for Rs.300 (example) and now selling the same at Rs.760. Can he claim exemption u/s 54 if he invest whole sales proceeds of Rs.760 in new residential property..... If answer is NO than how can he save income tax. Kindly advise... Regards

Nabin Agarwal

Nabin Agarwal (Expert)
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29 January 2025 Yes if the profit earned in invested in a new house property then you are eligible for deduction u/s 54. u can also refer https://cleartax.in/s/section-54-capital-gains-exemption

PARDEEP KAPIL

PARDEEP KAPIL (Querist)
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29 January 2025 Sir : The gap between PURCHASE and SALE is THREE MONTHS ONLY.... Please let me know that is section 54 applicable in short term capital gain as well ? Regards