Section 54

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Section 54 allows you to save on Long-Term Capital Gains (LTCG) tax by reinvesting in a residential property. You can indeed invest in a property that is under construction, provided it is completed within three years. To ensure you don't miss the deadline for filing your Income Tax Return (ITR), it's advisable to park any unutilised capital gains in a Capital Gains Account Scheme (CGAS) account.

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(Querist)
31 October 2020 Hello,
For the purpose of section 54 (to save LTCG tax), can I reinvest in a residential property which is under construction?
Or do I must only invest in a residential property which is ready to move in.

Appreciate your response!

Thanks, Pradeep
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CA R SEETHARAMAN

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CA R SEETHARAMAN (Expert)
31 October 2020 Yes you can invest in house under construction to be completed within 3 years.
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Dhirajlal Rambhia

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Dhirajlal Rambhia (Expert)
31 October 2021 In addition to above, park your un-utilized capital gain in CGAS, 1988 account before filing corresponding ITR.
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